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Comprehensive Annual Financial Report For the Year Ended December 31, 2014

ARVADA, COLORADO COMPREHENSIVE ANNUAL FINANCIAL REPORT For The Year Ended December 31, 2014

REPORT ISSUED BY:

DEPARTMENT OF FINANCE BRYAN ARCHER, DIRECTOR

COMPREHENSIVE ANNUAL FINANCIAL REPORT December 31, 2014

TABLE OF CONTENTS Section

Page

INTRODUCTORY SECTION Letter of Transmittal – Director of Finance ................................................................................. 1-4 Government Finance Officers Association Certificate of Achievement ....................................... 5 City Officials.................................................................................................................................. 6 Organizational Chart .................................................................................................................... 7

FINANCIAL SECTION Report of Independent Certified Public Accountants ......................................................... 9-11 Management’s Discussion and Analysis (unaudited) ........................................................ 13-24 Basic Financial Statements Government-wide Financial Statements Statement of Net Position............................................................................................... 25 Statement of Activities ................................................................................................. 26-27 Fund Financial Statements Governmental Funds Financial Statements Balance Sheet.......................................................................................................... 28 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ....................................................................... 29 Statement of Revenues, Expenditures, and Changes In Fund Balances ............... 30 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ....................................................................................... 31 General Fund Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual ............................................................... 32 Community Development Fund Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual ........................................ 33 Arvada Center Fund – Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual ............................................................... 34 Parks Fund - Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual ............................................................... 35 Proprietary Funds Financial Statements Statement of Net Position ........................................................................................ 36 Statement of Revenues, Expenses and Changes in Fund Net Position ................. 37 Statement of Cash Flows ......................................................................................... 38 Fiduciary Funds Financial Statements Statements of Fiduciary Net Position ...................................................................... 39 Statements of Changes in Fiduciary Net Position ................................................... 40 Notes to the Financial Statements .......................................................................... 41-73

COMPREHENSIVE ANNUAL FINANCIAL REPORT December 31, 2014

TABLE OF CONTENTS Section

Page

Required Supplementary Information (unaudited) Schedule of Funding Progress .......................................................................................... 75 Police Defined Benefit Pension Plan Schedule of Changes in Net Position and Related Ratios ............................................. 75 Schedule of City Contributions ....................................................................................... 76 Schedule of Money Weighted Returns ........................................................................... 76 Supplementary Information Combining and Individual Fund Statements and Schedules AEDA – Balance Sheet ............................................................................................ 77 AEDA – Statement of Revenues, Expenditures and Changes in Fund Balance .... 78 Non-Major Governmental Funds Combining Balance Sheet .................................................................................... 80-81 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............................................................................................ 82-83 Lands Dedicated Fund – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual ............................................... 84 Arvada Housing Authority – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual ............................................... 85 Police Seizure Fund – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual ............................................................... 86 Police Tax Increment Fund (.21) – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual ........................................ 87 Police Tax Increment Fund (.25) – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual ........................................ 88 Grants Fund - Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual ............................................................... 89 Bond Fund - Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual ............................................... 90 Debt Service Fund – Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual ............................................................... 91 Enterprise Funds Water Fund – Budgetary Comparison Schedule ..................................................... 94 Wastewater Fund – Budgetary Comparison Schedule ........................................... 95 Stormwater Fund – Budgetary Comparison Schedule ............................................ 96 Food Service Fund – Budgetary Comparison Schedule ......................................... 97 Golf Fund – Budgetary Comparison Schedule ........................................................ 98 Internal Service Funds Combining Statement of Net Position ..................................................................... 100 Combining Statement of Revenues, Expenses and Changes in Fund Net Position ...................................................................................................... 101 Combining Statement of Cash Flows ..................................................................... 102 Insurance Service Fund – Budgetary Comparison Schedule ................................. 103 Arvada Medical Fund .............................................................................................. 104 Computer Fund – Budgetary Comparison Schedule .............................................. 105 Print Shop Fund – Budgetary Comparison Schedule ............................................. 106 ii

COMPREHENSIVE ANNUAL FINANCIAL REPORT December 31, 2014

TABLE OF CONTENTS Section

Page Vehicle Fund – Budgetary Comparison Schedule .................................................. 107 Building Fund – Budgetary Comparison Schedule ................................................. 108 Fiduciary Fund Agency Fund – Statement of Changes in Assets and Liabilities ............................ 109 Financial Data Schedules ....................................................................................... 111-118

Other Information Local Highway Finance Report .................................................................................... 119-120

STATISTICAL SECTION (UNAUDITED) Financial Trends Net Position by Component ................................................................................................. 122 Changes in Net Position (expenses) ................................................................................... 123 Changes in Net Position (revenues) .................................................................................... 124 Fund Balances, Governmental Funds ................................................................................. 125 Changes in Fund Balances, Governmental Funds .............................................................. 126 Revenue Capacity Direct and Overlapping Property Tax Rates ........................................................................ 127 Sales and Use Tax Revenue ........................................................................................... 128-129 Principal Property Tax Payers ......................................................................................... 130-131 Property Tax Levies and Collections ................................................................................... 132 Assessed Value and Actual Value of Taxable Property ...................................................... 133 Debt Capacity Ratios of Outstanding Debt by Type .................................................................................... 134 Ratios of General Bonded Debt Outstanding ...................................................................... 135 Direct and Overlapping Governmental Activities Debt ........................................................ 136 Legal Debt Margin Information ............................................................................................ 137 Pledged-Revenue Coverage ............................................................................................... 138 Schedule of Debt Service Requirements – Governmental Activities................................... 139 Schedule of Debt Service Requirements – Business-type Activities................................... 140 Demographic and Economic Information Demographic and Economic Statistics ................................................................................ 141 Principal Employers ......................................................................................................... 142-143 Operating Information Full-time Equivalent City Government Employees by Function/Program ............................ 144 Operating Indicators by Function/Program .......................................................................... 145 Capital Asset Statistics by Function/Program ...................................................................... 146

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COMPREHENSIVE ANNUAL FINANCIAL REPORT December 31, 2014

TABLE OF CONTENTS Section

Page

COMPLIANCE SECTION Single Audit Reports Schedule of Expenditures of Federal Awards ..................................................................... 147 Notes to Schedule of Expenditures of Federal Awards ....................................................... 148 Independent Auditor’s Report on Internal Control over Financial Reporting and on the Compliance and other Matters Based on Audit of Financial Statements Performed in Accordance with Governmental Auditing Standards ............................................................................ 149-150 Independent Auditor’s Report on Compliance for each Major Federal Program and Report on Internal Control over Compliance ....................................... 151-153 Schedule of Findings and Questioned Costs .................................................................. 154-158 Summary Schedule of Prior Audit Findings ......................................................................... 159

Introductory Section

Introductory Section Letter of Transmittal Government Finance Officers Association Certificate of Achievement City Officials Organizational Chart

June 19, 2015 Citizens of the City of Arvada, Honorable Mayor, Members of City Council and City Manager We are pleased to submit the Comprehensive Annual Financial Report for Arvada, Colorado for the fiscal year ended December 31, 2014. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the management of the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present the financial position and results of operations of various funds and component units of the City in accordance with Generally Accepted Accounting Principles (GAAP). All disclosures necessary to enable the reader to gain an understanding of the City’s financial activities have been included. In addition to an annual audit of the City’s financial records performed by a third-party private auditor, the City is also required to have an annual single audit in conformity with the provisions of the Single Audit Act, as amended, and U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments and Non-Profit Organizations. Information related to this single audit, including the schedules of federal financial assistance, findings and recommendations, and independent auditors’ reports on the internal control structure and compliance with applicable laws and regulations, are available in the Single Audit Report. In conformity with generally accepted accounting principles, as set forth in Government Accounting Standards Board (GASB) Statement 39, Determining Whether Certain Organizations are Component Units and Statement 61, The Financial Reporting Entity: Omnibus- An Amendment of GASB Statements No. 14 and No. 34, this report includes all funds of the primary government and the City’s component units. For this report the City of Arvada and all its departments and funds comprise the Reporting Entity. Our component units are the Arvada Urban Renewal Authority and the Arvada Economic Development Association. The City is required to provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of management’s discussion and analysis (MD&A). This letter of transmittal is intended to complement the MD&A and should be read in conjunction with it. PROFILE OF THE CITY OF ARVADA The City of Arvada is located approximately 20 miles to the northwest of the City of Denver, Colorado along Interstate 70. The City provides a full range of services, including police protection, physical parks, planning and zoning, transportation planning, street improvements and maintenance, a housing authority, a regional cultural center, two golf courses, municipal court services, water, wastewater and stormwater services and facilities, along with various administrative functions. The area has separate governmental units that provide fire protection and recreational services. The population of the City is approximately 111,559. THE ECONOMIC FACTORS OF 2014 While some of the United States is still struggling to return to a “normal” economy, Colorado, and specifically the City of Arvada, have recovered and are now in a growth period. Overall revenues grew at 5.8% compared to 2013 and represented the fourth consecutive year of growth. In 2014, each department of the City completed their strategic business planning process. Included in this plan was a mission and vision statement, issue statements, strategic results and performance measures. Every one of these results and measures supports the Council’s adopted Strategic Plan, consisting of 30 overarching goals in four priority areas. This ongoing process is two plus years in the making and has been named FOCUS. FOCUS

City of Arvada Letter of Transmittal Comprehensive Annual Financial Report Page 2 has enabled the City to transform from a line item, division-based system to a data-driven, results-oriented, customer-focused and responsive organization. Along with FOCUS, the City remains committed to long-term financial planning including ten-year operating and capital improvements plans for all funds. In 2014, Council approved, by resolution, mandatory reserves for all of our major funds, further demonstrating a long-term conservative view of City finances. This enables the City to identify future challenges and work towards meeting them. The long-range financial planning process also makes sure that any decisions to add budget costs today can be paid for in the future. The City is in its fourth consecutive year of increasing sales tax growth. Sales tax receipts – which pay for just under 50% of our general expenditures – increased by 7.5% over 2013 levels. This represents the largest yearover-year increase since 2007. Growth was widespread as all five top sales tax-producing categories (grocery stores, general department stores, retail hardware, utilities and restaurants) were up for the year, with restaurants leading the way. Building activity continues its explosive growth. The City issued 581 single-family building permits in 2014, a 53% increase over 2013 and the largest number on record. To put this number into perspective, in 2009, the worst year of the Great Recession, we issued a total of 64 single-family building permits. Finally, automobile sales continue to increase double digits as we are in the middle of a six-year upward trend. Auto use tax, charged on the purchase of vehicles, was up 11% over 2013. While increased revenues continue to show a growing economy, the City remained conservative when adding new resources outside normal inflationary increases. Ongoing and future capital maintenance remains an important part of the City’s expenditures. In 2014, we dedicated over $6 million dollars to be spent on street repairs. The Water and Wastewater Funds spent over $7 million replacing pipe, and the Parks Fund continues to upgrade and replace outdated playgrounds. A complete study of the road system will be finalized in the summer of 2015 to help direct future maintenance needs. Large capital investments in our community will continue for the next few years. This includes ongoing work at two new Parks, Britton and Griffith, completion of Forest Springs, Spring Mesa and Ralston Central Parks, renovations at the Tennis Center and completion of the Sheridan Avenue Bridge replacement. Site work kicked off for the creation of the Olde Town Transit Hub, which will include plazas, pedestrian walkways, interpretive signage, a 600 plus parking structure and a bus transfer facility, all in support of the Olde Town Arvada rail stop. This project will continue through most of 2016 and will cost over $32 million. The Arvada Center is working hard on its proposed governance change. The creation of a new 501(c) 3, along with a governing board, has been completed and the proposed operating agreement will go to Council for approval in 2015. This will change the way the City brings culture and the arts to its citizens and the community. FUTURE ECONOMIC FACTORS The City of Arvada’s current sales tax base is primarily based upon grocery store-anchored shopping areas, with King Soopers and Safeway leading the way. In addition, we have major retailers Kohl’s, Costco, Sam’s Club, Conn’s, Target and Floor and Decor, along with two large home improvement stores, Home Depot and Lowes. All of these businesses continued to do well in 2014 with an average growth rate of 4.8%. As mentioned previously, single-family home building permits grew dramatically in 2014. Many of these homes range from $350,000 to upwards of $750,000 and have been selling at a brisk pace. This not only helps our building-related revenues but is bringing additional sales and use tax to the City. As development continues, we will see additional pressures on resources such as police, and have already seen the additional demand on the planning and building departments, driving the need for three new positions to help with planning, review and permitting.

City of Arvada Letter of Transmittal Comprehensive Annual Financial Report Page 3 The City continues to focus on three major development/redevelopment areas. These are the “Ralston Fields” urban renewal area, the three rail station stops and the completion of the 470 beltway. Each one of these areas has its own challenges but each will have a major financial impact on the City in the years to come. The “Ralston Fields” area was established in 2003 by City Council as an economic development area. The first phase of redevelopment included the addition of a Target, Big 5 and many smaller retail restaurants and shops. With the addition of a 360-unit, multi-family project, the area has seen increased usage. The next phase of development will occur in the “triangle” area, recently named “Ralston Creek”. Auto Zone and Walmart have begun construction on their new buildings with further re-development scheduled for later in 2015. The three rail stations are in various stages with the Olde Town Station being the furthest along. As stated earlier, Phase 1 of the transit-oriented development is well underway. Phase 2 will include retail, office space and higher density residential, and should begin in the fall of 2016. The Kipling Station is located in the Ralston Fields redevelopment area and right next door to the large ongoing multi-family project. Red Rocks Community College, located across the street from this rail stop, has announced a $20 million expansion that will begin construction in 2016. Finally, the Sheridan Station, with the completion of the new overpass bridge on Sheridan, has started construction on its platform and parking. Each one of these areas will benefit the City in the short term with retail sales tax, and in the long term with added commercial and residential development. The completion of the 470 beltway will also have long-term implications. The final ten miles is between Broomfield County, Jefferson County and the City of Arvada. These three entities have created a joint Public Highway Authority to determine if a public-private partnership (P3) can be created to complete this integral piece of the regional transportation system. In 2014, further discussions occurred with various entities about connectivity and various challenges. This is the last piece of a large transportation project that would connect I-25 to I-70 west to the mountains. Overall, we continue to see signs of a growing and improving economy. We believe the investment in basic infrastructure and keeping our focus on the three prime areas of economic growth will enable the City to continue the concept of growing at a sustainable rate. FINANCIAL INFORMATION Pension Trust Funds: The City has three defined contribution programs for different types of employees. These are the City of Arvada Retirement Program (CARP) for its regular employees; the Arvada Police Pension Plan (APPP) for its uniformed police officers; and the Executive Management Program for the appointed management team. The City deposits between 10% – 15% into an individual’s account and the employee must contribute between 8% – 10%. The employee directs their own investments within a limitation of funds as identified by each Board. In addition, the City offers voluntary 457 programs where employees can place additional dollars for retirement on a tax-free basis. All four retirement programs have independently elected Boards. The APPP uses Fidelity Investments as their record keeper. The others all use Empower Retirement Services. The Council adopts the investment plans of all the Boards. The City also has one defined benefit plan that covers one fully vested participant that did not elect to participate in the Arvada Police Pension Plan that became effective in 1986. Internal Control Structure: The City of Arvada establishes and maintains an internal control structure designed to ensure that the assets of the City are protected from loss, theft, or misuse, and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived, and valuation of costs and benefits requires estimates and judgments by management. Budgetary Controls: The City of Arvada maintains budgetary controls in order to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City of Arvada’s City Council, its governing body. All activities of the City are included in the annual appropriated budget. The City maintains an accounting

City of Arvada Letter of Transmittal Comprehensive Annual Financial Report Page 4 system to provide management with information regarding obligations against appropriations. Budgetary compliance is based on expenditures during the period (GAAP), rather than expenditures and encumbrances (nonGAAP). Because appropriations lapse at December 31, encumbrances outstanding are carried over and become a liability on the 2015 budget. Appropriations for fiscal year 2015 will provide the authority to complete those transactions. Single Audit: As a recipient of federal and state financial assistance, the City is responsible for ensuring that adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to those programs. As part of the City's single audit, tests are performed to determine the adequacy of the internal control structure, including that portion related to federal financial assistance programs, as well as to determine that the City has complied, in all material respects, with applicable laws and regulations. The results of the City’s single audit for fiscal year 2014, including any reported instances of significant deficiencies in the internal control structure or any violations of applicable laws and regulations, are available in the Single Audit Report. Independent Audit: Section 10.9 of the City of Arvada’s charter requires an annual audit of accounts and other evidences of financial transactions of the City and its departments by independent certified public accountants. The audit is performed by a firm chosen by a five-member audit board consisting of the City Manager, the two Deputy City Managers, and two members of the City Council, known as the Finance Committee. This year BKD, LLP, a firm of independent accountants, audited the financial statements for the year ended December 31, 2014. AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Arvada for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended December 31, 2013. The City of Arvada has received this award for 30 consecutive years. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized CAFR. This report must satisfy generally accepted accounting principles and applicable legal requirements. A certificate of achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the certificate of achievement program requirements and we are submitting it to the committee to determine its eligibility for another certificate. The preparation of this report could not have been accomplished without the professionalism and dedication demonstrated by the financial and management personnel of each department. Special mention needs to be directed to the dedicated employees of the Finance Department charged with ensuring that all accounting principles are adhered to each and every day, thus ensuring the efficient and effective preparation of this audit and document. Special thanks go to Lisa Yagi, Assistant Finance Director; Debra Nielson, Controller; and many people of their team. The production of the document was in the capable hands of Arlene Martinez, the Finance Department’s Executive Assistant, as well as Steve Milke and Bun Heng, the City’s Creative Services Design and Print Services staff. Respectfully submitted,

Bryan Archer Director of Finance

COMPREHENSIVE ANNUAL FINANCIAL REPORT December 31, 2014

City Officials Marc Williams Mayor (Term expires 2015) Don Allard Councilmember – At-Large (Term expires 2017) Bob Fifer Councilmember – At-Large (Term expires 2015) Gerald Marks Councilmember – District 1 (Term expires 2015) Mark McGoff Councilmember – District 2 (Term expires 2015) John Marriott Councilmember – District 3 (Term expires 2017) Bob Dyer Councilmember – District 4 (Term expires 2015)

City Manager and Key Staff Mark G. Deven Lorie Gillis William Ray David Cooke Christopher K. Daly Rita McConnell Ron Czarnecki Ryan Stachelski Robert Manwaring Linda Haley Maureen Phair Gordon Reusink Bryan Archer Philip Sneed James Sullivan Don Wick Chris Koch

City Manager Deputy City Manager Deputy City Manager Municipal Judge City Attorney Director of Community Development Director of Information Technology Director of Arvada Economic Development Association Director of Public Works Director of Human Resources Executive Director of Arvada Urban Renewal Authority Director of Parks, Golf and Hospitality Services Director of Finance Executive Director of Arvada Center Director of Utilities Chief of Police City Clerk

COMPREHENSIVE ANNUAL FINANCIAL REPORT December 31, 2014

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Reports of Independent Certified Public Accountants Managementâ€™s Discussion and Analysis Basic Financial Statements Notes to the Financial Statements

Financial Section

Report of Independent Certified Public Accountants

Independent Auditor’s Report

Honorable Mayor and Members of City Council City of Arvada Arvada, Colorado Report on Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component units, each major fund and the aggregate remaining fund information of the City of Arvada (the City), as of and for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

Honorable Mayor and Members of City Council City of Arvada

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of the City as of December 31, 2014, and the respective changes in financial position, budgetary comparisons, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter

As discussed in Note H to the financial statements, in 2014, the City adopted Governmental Accounting Standards Board (GASB) Statement No. 67, Financial Reporting for Pension Plans - an amendment of GASB Statement No. 25 (GASB 67). Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the managementâ€™s discussion and analysis, other postemployment benefits and pension information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with managementâ€™s responses to our inquiries, the basic financial statements and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Cityâ€™s basic financial statements. The combining and individual fund financial statements and schedules, and other supplementary information, including the schedule of expenditures of federal awards required by OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and financial data schedules for the Arvada Housing Authority, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information 10

Honorable Mayor and Members of City Council City of Arvada

directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole. Other Information

Our audit was conducted for the purpose of forming opinions on the basic financial statements as a whole. The introductory, local highway finance report, and statistical sections listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 12, 2015, 2015, on our consideration of the Cityâ€™s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Cityâ€™s internal control over financial reporting and compliance.

Denver, Colorado June 12, 2015

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Managementâ€™s Discussion and Analysis

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) December 31, 2014

This section of the City of Arvada’s Comprehensive Annual Financial Report provides readers with a narrative overview and analysis of the City’s financial performance during the fiscal year that ended on December 31, 2014. We encourage readers to consider the information presented here in conjunction with the letter of transmittal at the front of this report, the City’s basic financial statements and notes to the financial statements, to enhance their understanding of the activities and financial health of the City of Arvada. Overview of Financial Statements This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements consist of the following three components: • • •

Government-wide Financial Statements Fund Financial Statements Notes to the Financial Statements

Other supplementary information is also included at the end of the report. Government-wide Financial Statements. The government-wide statements are designed to provide readers with a broad overview of the City’s finances using the accrual basis of accounting, the basis of accounting used by most private-sector businesses. The statement of net position presents information on all of the City’s assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the difference reported as net position. Over time, increases and decreases in net position may provide an indication of whether the City’s financial position is improving or deteriorating. The statement of activities presents information reflecting how the City’s net position has changed during the fiscal year that just ended. All changes in net position are reported as soon as the underlying activity occurs. Thus, revenues and expenses are reported in these statements for some items that will only result in cash flows in future periods (e.g. uncollected taxes and earned but unused vacation leave). The government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (government activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public works, parks, cultural and human service. The business-type activities of the City include water, wastewater, stormwater, golf and food service. The government-wide financial statements also include both the Arvada Urban Renewal Authority and Arvada Economic Development Association as discretely presented component units of the City. Fund Financial Statements. Traditional users of the City’s financial statements will find the fund financial statement presentation more familiar. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. A major fund should generally meet both of the following criteria: 1) total assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, or expenditures/expenses are at least 10% of the corresponding total (assets and deferred outflows of resources, liabilities and deferred inflows of resources or expenditures/expenses) for that fund type (i.e. governmental or enterprise funds) and 2) total assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, or expenditures/expenses of the individual

MANAGEMENTâ€™S DISCUSSION AND ANALYSIS (UNAUDITED) December 31, 2014

governmental or enterprise fund are at least 5% of the corresponding total for all governmental and enterprise funds combined. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All funds of the City can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental Funds. Governmental funds are used to report those same functions reported as governmental activities in the government-wide financial statements. However, unlike the governmentwide statements, the fund financial statements are prepared on the modified accrual basis. Under the modified accrual basis of accounting, revenues are recognized when they become measurable and available, and expenditures are recognized when the related fund liability is incurred, with the exception of long-term debt and similar long-term items which are recorded when due. Therefore, the focus of the governmental fund financial statements is on near-term inflows and outflows of spendable resources as well as on the balance of spendable resources available at the end of the fiscal year. Since the focus of the governmental funds is on near-term resources, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. To facilitate this comparison, reconciliations are provided for both the governmental fund balance sheet and the governmental statements of revenues, expenditures and changes in fund balances. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balance for the General fund, Community Development fund, Arvada Center fund, Parks fund, and the General Capital Projects fund. These five funds are considered to be major funds. Data from the other governmental funds is combined into a single aggregated presentation. Individual fund data for each of these non-major funds is provided in the form of combining statements located within the supplementary information following the notes to the financial statements. The City adopts an annual appropriated budget for all of its governmental funds. A budgetary comparison statement has been provided to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 28-31 of this report. Proprietary Funds. The City maintains two different types of proprietary funds, enterprise and internal service funds. The proprietary fund financial statements are prepared on the accrual basis of accounting. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water, wastewater, stormwater, food service and golf operations. Internal service funds are accounting devices used to accumulate and allocate costs internally among the Cityâ€™s various functions. The City uses internal service funds to account for dental benefits provided by the City, its risk management program, its medical benefits, its replacement of vehicles and information technology equipment, maintenance of vehicles and buildings and its print shop operations. The activity in these funds is allocated between the governmental and business-type activities based upon actual usage. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The Water, Wastewater, Stormwater and Food Services enterprise funds are considered to be major funds and are therefore presented separately within the proprietary fund financial statements. All internal service funds are considered to be non-major funds and they are combined into a single, aggregated column in the proprietary fund statements. Individual fund data for each of the non-major proprietary funds is provided in the form of combining statements located within the supplementary information following the notes to the financial statements. 14

MANAGEMENTâ€™S DISCUSSION AND ANALYSIS (UNAUDITED) December 31, 2014

The basic proprietary fund financial statements can be found on pages 36-38 of this report. Fiduciary Funds. The City maintains two different types of fiduciary funds, trust and agency funds. The fiduciary fund financial statements are prepared on the accrual basis of accounting. The fiduciary funds are used to account for resources held by the City in a trustee capacity or as an agent for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of these funds are not available to support the Cityâ€™s own programs. The funds underlying each of the fiduciary fund types are combined into a single, aggregated column in the fiduciary fund statements The City does not adopt an annual appropriated budget for its fiduciary funds. The basic fiduciary fund financial statements can be found on pages 39-40 of this report. Notes to the Financial Statements. The notes to the basic financial statements are considered an integral part of the financial statements since they provide additional information needed to gain a full understanding of the data provided in both the government-wide and fund financial statements. The notes to the financial statements can be found on pages 41-73 of this report. Combining Statements. The combining statements referred to earlier in connection with the non-major governmental funds, non-major enterprise funds, internal service funds and fiduciary funds are presented following the required notes to the financial statements. Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government financial position. At the close of December 31, 2014, the Cityâ€™s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $753,453,000. The following summaries of net position and changes in net position are presented for the current year and the previous year in comparison format.

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) December 31, 2014

Statement of Net Position The following table reflects the condensed Statement of Net Position: City of Arvada Statement of Net Position December 31, 2014 (in thousands) Governmental Activities

Other liabilities Long-term liabilities Total liabilities Deferred inflows of resources Net position: Net investment in capital assets Restricted Unrestricted

Total Net position

Total Primary Government 2014

2013

95,274 253,597 348,871

$ 229,518 584,932 7,111 821,561

$ 221,365 547,017 6,765 775,147

6,778 11,012 17,790

5,757 13,054 18,811

25,599 37,819 63,418

23,051 44,140 67,191

4,658

4,690

4,658

292,888 27,518 82,805

262,131 19,018 92,089

252,606 1,805 95,831

238,881 1,536 89,643

545,494 29,323 178,636

501,012 20,554 181,732

403,211

$ 373,238

$ 350,242

$ 330,060

$ 753,453

$ 703,298

2013

2014

126,799 319,619 7,111 453,529

$ 126,091 293,420 6,765 426,276

$ 102,719 265,313 368,032

18,821 26,807 45,628

17,294 31,086 48,380

4,690

2014 Current and other assets Capital assets Other non-current assets Total assets

Business-type Activities 2013 $

For more detailed information, see the Statement of Net Position on page 25 of this report. By far the largest portion of the City’s Governmental net position, $292,888,000 (73%), reflects its investment in capital assets (e.g. land, buildings, improvements, infrastructure and equipment), less any debt used to acquire those assets still outstanding. The City of Arvada uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City’s Governmental net position, $27,518,000 (7%), represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position, $82,805,000 (20%), may be used to meet the City’s ongoing obligations to its citizens and creditors. The City’s total net position increased by $50,155,000 during the current fiscal year. This is due to an increase in the governmental activities of $29,973,000 and an increase in the business-type activities of $20,182,000. The increase is primarily due to contributed capital from developers and increases in user fees that will be used for current and future capital projects.

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) December 31, 2014

Changes in Net Position The following table reflects a condensed summary of activities and changes in net position: City of Arvada Statement of Activities December 31, 2014 (in thousands) Governmental Activities 2014 Revenues Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Sales and use taxes Property & ownership taxes Other taxes and fees Investment earnings (loss) Other Total revenues Expenses General government Public safety Public works Parks and recreation Culture Human service Interest Water Wastewater Stormwater Golf Food Total expenses Change in net position before transfers Transfers Increase in net position Net position, beginning Net position, ending

16,633 11,330 22,287

2013

64,429 4,977 4,757 949 3,306 128,668 $

17,745 27,154 30,460 8,173 10,467 4,750 1,107 99,856 28,812 1,161 29,973 373,238 403,211

Business-type Activities

14,329 11,681 6,706

2014

22,193 26,578 28,117 7,428 10,797 4,558 1,119 100,790

6,079 2,418 8,497 364,741 $ 373,238

2013

680 104 61,898

58,519 4,907 4,646 107 5,974 106,869 $

39,788 21,326

20,985 11,659 1,983 4,526 1,402 40,555

21,343 (1,161) 20,182 330,060 $ 350,242

Total Primary Government

42,341 17,633

2014

(56) 104 60,022 $

20,609 11,536 1,811 4,246 1,518 39,720

20,302 (2,418) 17,884 312,176 $ 330,060

56,421 11,330 43,613

2013

64,429 4,977 4,757 1,629 3,410 190,566 $

17,745 27,154 30,460 8,173 10,467 4,750 1,107 20,985 11,659 1,983 4,526 1,402 140,411

50,155 50,155 703,298 $ 753,453

56,670 11,681 24,339 58,519 4,907 4,646 51 6,078 166,891

22,193 26,578 28,117 7,428 10,797 4,558 1,119 20,609 11,536 1,811 4,246 1,518 140,510

26,381 26,381 676,917 $ 703,298

For more detailed information, see the Statement of Activities on pages 26-27 of this report. The above condensed summary of the City of Arvada’s governmental and business-type activities for the year ended December 31, 2014 reflects net position increasing $50,155,000. Revenues and expenses graphs are presented below to enhance the reader’s understanding of the current year activities.

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) December 31, 2014

Governmental Activities Governmental Activities increased Arvada’s Net Position by $29,973,000.

2014 Revenues by Source Governmental Activities Other taxes and fees 4% Property and ownership taxes 4%

Investment earnings 1%

Other 2%

Charges for Services 13% Operating grants and contributions 9%

Capital grants and contributions 17%

Sales and use taxes 50%

2014 Expenses and Program Revenues Governmental Activities $35,000 $30,000 $25,000

'Expense'

$20,000

'Revenue'

$15,000 $10,000 $5,000 $-

General Govt

Public Safety

Public Works

Parks & Rec

Culture

Human Interest Svc

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) December 31, 2014

Business-type Activities Business-type Activities increased Arvada’s Net Position by $20,182,000

2014 Revenues by Source Business Activities Investment earnings 1%

Capital grants and contributions 35%

Charges for Service 64%

2014 Expenses and Program Revenues Business-Type Activities $35,000 $30,000 $25,000

'Expense'

$20,000

'Revenue'

$15,000 $10,000 $5,000 $-

Water

Wastewater Stormwater

Golf

Food

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) December 31, 2014

Governmental activities. Governmental activities increased the City’s net position by $29,973,000. Key elements of this change are due to the following: • • • •

Capital contributions from developers amounted to $21,948,000 Sales and use tax collections were up $5,910,000 Investment earnings were up $842,000 Charges for services were up $2,304,000

Business-type activities. Business-type activities increased the City’s net position by $20,182,000. Key elements of this increase are due to the following: • •

Capital contributions from developers amounted to $10,158,000. The Water and Wastewater funds saw increases in tap fee revenues as a few new single-family home developments started construction during 2014. These tap fee revenues will be used for future capital needs.

Financial Analysis of the City’s Funds As noted previously, the City uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements. Governmental funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of year. In 2011, the City implemented The Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. This Statement defines the different types of fund balances that a governmental entity must use for financial reporting purposes. Per GASB 54, as of December 31, 2014, fund balances of governmental funds are classified as follows: Non-spendable – amounts that cannot be spent either because they are not spendable in form or because they are legally or contractually required to be maintained intact. The City had $813,000 in nonspendable resources. Restricted – amounts that are subject to externally enforceable legal purpose restrictions imposed by creditors, grantors, contributors, or law and regulations of other governments; or through constitutional provisional or enabling legislations. The City had $19,291,000 in restricted resources. Committed – amounts that are subject to a purpose constraint imposed by a formal action of the City Council. The City Council is the highest level of decision-making authority for the City. Commitments may be established, modified or rescinded only through resolutions and ordinances approved by the City Council. The City had $22,764,000 in committed resources. Assigned – amounts that are for an intended use established by the City, but that are not considered restricted or committed. The purpose of the assignment must be narrower than the purpose of the General Fund. The City had $26,050,000 in assigned resources. Unassigned – represents the remaining balance for the City’s General Fund. The City had $25,296,000 in unassigned resources.

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) December 31, 2014

The General Fund is the main operating fund of the City. At December 31, 2014, the non-spendable fund balance was $705,000, the restricted fund balance was $2,248,000, the assigned fund balance was $2,598,000 and the unassigned fund balance was $25,296,000. The total fund balance increased $5,172,000 in 2014 to $30,847,000. On a budgetary basis, the General Fund finished over $10,050,000 to the good. Sales and Use tax came in $3,835,000 over budget. This represented an increase of 10.9% over 2013. The Community Development Fund is a major fund of the City. At December 31, 2014, the restricted fund balance was $1,469,000 and the assigned fund balance was $4,830,000. Total fund balance decreased $597,000 in 2014 to $6,299,000. This was caused by the usage of fund balance to offset program expenses. In some years, the demand for the Essential Home Repairs Program exceeds the allotted Federal dollars. When this happens, resources are pulled from the fund balance to help offset the demand. The Arvada Center Fund is a major fund of the City. At December 31, 2014, the non-spendable fund balance was $38,000, the restricted fund balance was $429,000 and the assigned fund balance was $151,000. The total fund balance decreased $28,000 in 2014 to $618,000. The Parks Fund is a major fund of the City. At December 31, 2014, the non-spendable fund balance was $40,000 the restricted fund balance was $145,000 and the assigned fund balance was $4,270,000. The total fund balance increased $155,000 in 2014 to $4,455,000. The General Capital Projects Fund is another major fund of the City. At December 31, 2014, the nonspendable fund balance was 12,000 the restricted fund balance was $2,132,000, the committed fund balance was $22,764,000 and the assigned fund balance was $14,201,000. The total fund balance decreased $6,197,000 in 2014 to $39,109,000. This decrease is due to fewer transfers from the general fund and grants fund for multi-year projects such as Ralston Central Park and the East and South Central Park, transfers for these projects were done in 2013. This decrease is also due to the start of construction on the East and South Central Parks and Olde Town Transit Hub for the Gold Line project. Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The unrestricted net position balances of the City’s proprietary funds (including the major enterprise funds) are reflected in the following table:

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) December 31, 2014

Table of Unrestricted Net Position Change in Net Position - Proprietary Funds (in thousands) Unrestricted Net Position for Year ended 12/31/13

Unrestricted Net Position for Year ended 12/31/14 Major Enterprise Funds Water Wastewater Stormwater Golf Food Total of major enterprise funds Internal service funds Total proprietary funds

71,970 13,047 5,564 207 602 91,390 20,017 111,407

66,779 11,893 5,941 101 554 85,268 19,208 104,476

Component units. The Arvada Economic Development Association (AEDA) was established to encourage all forms of economic development. Funding for AEDA consists of compensation from the City for services it renders the City and its citizens. The statement of net position reflects an unrestricted net position of $1,055,000. The total change in net position for AEDA was a decrease of $218,000. The Arvada Urban Renewal Authority (AURA) was created by Ordinance No. 1717 under the Colorado Urban Renewal Law and approved by voters on March 3, 1981. AURA’s purpose is to develop, redevelop or rehabilitate blighted areas of the City. The governing body of AURA is a commission of seven members, appointed by the Mayor and approved by City Council. AURA’s annual budget is approved by the City Council and the City provides administrative support to AURA. The statement of net position reflects $17,000 of restricted net position balance and $8,751,000 of unrestricted net position balance. The total change in net position for AURA was an decrease of $611,000. Budgetary Highlights General Fund. The increase from the original budgeted expenditures and transfers out to the final budget amounted to $7,455,000, (not all inclusive) are summarized as follows: • • • • • • • • • • • • •

Added $1,455,000 for additional funding related to the Parkway Added $11,000 for succession planning Added $6,000 for software implementation Added $150,000 for Colorado Health Foundation grant expenditures Added $16,000 for harassment training Added $36,877 for property and evidence bar code software Added $100,000 for implementing conduit for fiber optics and dry utilities Added $243,638 for completion of the comprehensive plan and land development code Added $102,741 for completion of the historic survey Added $1,033,407 for various one-time expenditures Added $3,150,000 for funding related to the Olde Town Transit Hub Added $200,000 for costs related to inspection and plan review services Added $150,000 for a loan and grant agreement to operate a recycling drop site 22

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) December 31, 2014

• •

Added $375,000 additional cash transfer to the Arvada Center Added $424,337 for additional personnel costs not included in the budget

Capital Asset and Debt Administration Capital Assets. The City’s investment in capital assets for its governmental and business-type activities as of December 31, 2014 amounted to $584,932,000 (net of accumulated depreciation). This investment in capital assets includes land, water rights, buildings and improvements, equipment and infrastructure.

City of Arvada Capital Assets (net of depreciation) as of December 31, 2014 (in thousands)

Land and water rights Infrastructure Construction in progress Buildings Improvements other than buildings Equipment & vehicles Total capital assets

Governmental Activities

Business-type Activities

Total Primary Government

53,575 146,125 21,140 24,981 66,924 6,874 319,619

39,512 6,529 11,938 6,864 199,725 745 265,313

93,087 152,654 33,078 31,845 266,649 7,619 584,932

Major capital improvements during this fiscal year include the following: Governmental Activities • Completion of Whisper Creek Phase 3 • Completion of Memorial Park renovations • Completion of Wolff Park • On-going traffic signal replacement

Proprietary Activities • On-going improvements at the water treatment plan • Completion of Ridge Road tributary • On-going maintenance and replacement of water, sewer and stormwater lines • Improvements in Leyden Rock subdivision Additional information of the City’s capital assets can be found in Note 3.B on pages 58-59 of this report.

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) December 31, 2014

Long-term debt. At the end of December 31, 2014, the City had total debt outstanding of $40,671,000. Of this amount, $26,215,000 represents bonds secured by specified revenue sources (i.e. sales tax revenue bonds and water revenue bonds). The remaining $14,456,000 represents capital leases of $440,000, Certificates of Participation of $11,300,000, and an OPEB liability of $2,716,000.

City of Arvada Outstanding Debt as of December 31, 2014 (in thousands) Governmental Activities

Business-type Activities

Total Primary Government

Revenue bonds Certificates of Participation Capital leases

$ $ $

14,360 11,300 212

11,854 228

26,214 11,300 440

Total outstanding debt

25,872

12,082

37,954

Additional information on the City’s long-term obligations can be found in Note 3.E on pages 61-64 of this report. Financial Contact The City’s financial statements are designed to provide users (citizens, taxpayers, customers, investors and creditors) with a general overview of the City’s finances and to demonstrate the City’s accountability. Questions concerning any of the information presented in this report or requests for additional information should be sent to the City’s Finance Director at the following address: City of Arvada Director of Finance 8101 Ralston Road Arvada, CO 80002

Basic Financial Statements Basic Financial Statements

STATEMENT OF NET POSITION December 31, 2014 (in thousands) Governmental Activities ASSETS Cash and investments Restricted cash Taxes receivable Accounts receivable, net of allowance for uncollectibles Accrued interest Internal balances Inventories Prepaid costs Notes receivable - non-current Property available for sale Investment in LLC Deposit Capital assets Land, water rights and construction in progress Other capital assets, net Total capital assets Total assets LIABILITIES Accounts payable Contracts payable Accrued interest payable Unearned revenue Long-term liabilities Due within one year: Bonds & notes payable Claims payable Certificates of Participation Capital leases Compensated absences Due more than one year: Bonds & notes payable Certificates of Participation Capital leases OPEB Compensated absences Total liabilities DEFERRED INFLOWS OF RESOURCES Property taxes deferred NET POSITION Net Investment in capital assets Restricted for: Conversation Trust Law Enforcement/Seizure Emergencies Donor Intentions CDGB Debt Service Lands Dedicated Adams County Open Space Adams County Transportation Park Development Scholarships and Grants Letter of Credit Other Unrestricted Total Net Position

Primary Government Business-type Activities

108,783 6,406 12,001

Total

7,346 157 1,121 889 7,111 -

142 6 220 7,317 2,000 322

74,715 244,904 319,619 453,529

51,450 213,863 265,313 368,032

126,165 458,767 584,932 821,561

1 1 20,149

1,294

9,327 121 944

2,677 1,465 80 135

12,004 1,465 201 1,079

117 -

44 195

3,636 1,680 945 114 2,054

1,909 151 361

5,545 1,680 945 265 2,415

14 -

11,583 10,355 98 2,716 2,055 45,628

10,570 77 365 17,790

22,153 10,355 175 2,716 2,420 63,418

4,759 4,890

239

4,690

6,490

292,888

252,606

545,494

1,849 7,604 2,946 58 1,446 435 2,694 215 536 1,316 156 36 91,032 403,211

1,805 95,831 350,242

1,849 7,604 2,946 58 1,446 2,240 2,694 215 536 1,316 156 36 186,863 753,453

17 8,751 8,769

1,055 1,055

The accompanying notes are an integral part of these financial statements. 25

164,512 43,492 12,001

AEDA

4,830 78 4,441 429 126 -

AURA

580 707 1 6 -

2,516 79 (4,441) 692 763 7,111 -

55,729 37,086 -

Component Units

3,651 6,490

STATEMENT OF ACTIVITIES Year Ended December 31, 2014 (in thousands)

Program Revenues

Expenses FUNCTIONS/PROGRAM ACTIVITIES: Primary Government: Governmental activities: General government Public safety Public works Parks and recreation Culture Human services Interest expense Total governmental activities Business-type activities: Water Wastewater Stormwater Golf Food Total business-type activities Total primary government Component Units: AURA AEDA Total component units

$ $ $

17,745 27,154 30,460 8,173 10,467 4,750 1,107 99,856

20,985 11,659 1,983 4,526 1,402 40,555 140,411 6,974 976 7,950

Charges for Services

6,212 4,761 967 4,693 16,633

19,215 11,334 3,395 4,444 1,400 39,788 56,421

$ $

233 233

Operating

Capital

Grants and Contributions

$ $ $

The accompanying notes are an integral part of these financial statements. 26

900 1,677 3,686 1,039 4,028 11,330

11,330 747 747

$ $ $

Total

21,948 339 22,287

15,645 3,783 1,898 21,326 43,613 -

$ $ $

29,060 1,677 5,100 4,653 5,732 4,028 50,250

34,860 15,117 5,293 4,444 1,400 61,114 111,364 233 747 980

STATEMENT OF ACTIVITIES Year Ended December 31, 2014 (in thousands)

Net (Expense) Revenue and Changes in Net Position Primary Government - City of Arvada Governmental Activities

Business-type Activities

11,315 (25,477) (25,360) (3,520) (4,735) (722) (1,107) (49,606)

(49,606) $

General Revenues Taxes: Property Sales and use Transportation tax Investment earnings Miscellaneous Transfers in (out) Total general revenues Change in net position Net position, January 1 Net Position, December 31

4,977 64,429 4,757 949 3,305 1,162 79,579 29,973 373,238 403,211

Total

13,875 3,458 3,310 (82) (2) 20,559 20,559 $

680 105 (1,162) (377) 20,182 330,060 350,242

11,315 (25,477) (25,360) (3,520) (4,735) (722) (1,107) (49,606)

13,875 3,458 3,310 (82) (2) 20,559 (29,047) $

4,977 64,429 4,757 1,629 3,410 79,202 50,155 703,298 753,453

The accompanying notes are an integral part of these financial statements.

Component

Unit AURA

Unit AEDA

- $ -

(6,741) $ (6,741)

(229) (229)

5,372 32 3 723 6,130 (611) 9,380 8,769 $

11 11 (218) 1,273 1,055

GOVERNMENTAL FUNDS BALANCE SHEET December 31, 2014 (in thousands)

General Fund ASSETS Cash and investments $ Restricted cash Taxes receivable Account receivable, net of allowance for uncollectibles Accrued interest Due from other funds Inventories Prepaid costs Non-current notes receivable, net of allowance for uncollectibles $ Total assets

29,405 11,300

Community Development Fund

Primary Government General Capital Arvada Projects Center Parks Fund

307 34 12 352 353 5,104 46,867

4,780 1,446 -

1,976 8,297

1,803

3,442 689

835 5 8 32

27 1 77 38

95 -

1,209 451 -

5 5,016

35,994 4,509 12

Other Governmental Funds

Total Governmental Funds

258 1 12

26 40,812

12,317 990 7 18

13,332

87,147 6,406 12,001 2,512 48 12 437 453

7,111 116,127

LIABILITES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES LIABILITIES Accounts payable Due to other funds Unearned revenue Total liabilities

6,082 144 6,226

22 22

425 760 1,185

532 29 561

1,441 26 1,467

382 12 52 446

8,884 12 1,011 9,907

4,690 359 4,745

1,976

236

4,690 359 6,957

9,794

1,976

236

12,006

705 2,248 2,598 25,296

1,469 4,830 -

38 429 151 -

40 145 4,270 -

12 2,132 22,764 14,201 -

18 12,868 -

813 19,291 22,764 26,050 25,296

30,847

6,299

618

4,455

39,109

12,886

94,214

DEFERRED INFLOW OF RESOURCES Unavailable Property taxes Grants Loan Total deferred inflows of resources FUND BALANCES Reserved for: Nonspendable Restricted Committed Assigned Unassigned

Total fund balances Total liabilities, deferred inflows of resources, and fund balances

46,867

8,297

The accompanying notes are an integral part of these financial statements.

1,803

5,016

40,812

13,332

116,127

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION December 31, 2014 (in thousands)

Amounts reported for governmental activities in the statement of net position are different because: Total fund balances – governmental funds

$ 94,214

Capital assets net of accumulated depreciation used in governmental activities are not current financial resources. Therefore, they are not reported in the fund financial statement.

313,185

Internal service funds are used by management to charge the costs of certain activities to individual funds. A portion of the assets and liabilities of internal service funds are included in the governmental activities in the statement of net position. Long-term assets are not available to pay current year expenditures and therefore are deferred in the fund statements Notes Receivable – non-current net of allowance Grants Receivable – non-current AURA Note Subtotal

Long-term liabilities and related items are not due and payable in the current period and accordingly are not reported in the fund financial statements. Balances at December 31, 2014 are: Bonds payable Obligation under certificates of participation Interest Accrual OPEB Compensated absences Subtotal Net position of governmental activities

21,798

2,212 426 4,745 7,383

(15,219) (11,300) (121) (2,716) (4013) (33,369) $ 403,211

The accompanying notes are an integral part of these financial statements.

GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES Year Ended December 31, 2014 (in thousands)

REVENUES Property and ownership taxes Sales and use taxes Franchise fees Licenses & permits Intergovernmental Charges for services Recovered costs Fines & forfeitures Investment earnings Memberships, donations & dedications Miscellaneous Total Revenues

General Fund

Community Development Fund

EXPENDITURES Current expenditures: General government Public safety Public works Parks and recreation Culture Human services Debt service Principal Interest Capital outlay Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) NET CHANGE IN FUND BALANCES FUND BALANCES, BEGINNING FUND BALANCES ENDING

4,977 51,906 4,510 4,833 5,052 859 744 1,609 372 66 74,928

511 11 243 765

Primary Government General Capital Projects Arvada Fund Center Parks $

1,039 4,693 25 284 122 6,163

48 3,686 919 42 146 4,841

917 350 63 489 338 2,157

Other Governmental Funds $

12,524 4,130 176 333 273 17,436

Total Governmental Funds $

4,977 64,430 4,510 4,881 15,335 5,552 2,013 1,609 689 1,106 1,188 106,290

13,376 20,250 21,443 -

994

10,170 -

7,576 -

1 6,950 3,777

13,377 27,200 21,443 7,576 10,170 4,771

45 55,114

994

10,170

23 7,599

15,812 15,812

4,185 1,120 2,548 18,581

4,185 1,120 18,428 108,270

19,814

(229)

(4,007)

(2,758)

(13,655)

(1,145)

(1,980)

126 (14,768) (14,642)

45 (413) (368)

3,979 3,979

2,937 (24) 2,913

7,735 (277) 7,458

2,116 (555) 1,561

16,938 (16,037) 901

(597) 6,896 6,299

(28) 646 618

5,172 25,675 30,847

The accompanying notes are an integral part of these financial statements.

155 4,300 $ 4,455

(6,197) 45,306 39,109

416 12,470 12,886

(1,079) 95,293 94,214

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Year ended December 31, 2014 (in thousands) Net change in fund balances â€“ total government funds

$ (1,079)

Governmental funds report capital outlays as expenditures. However in the statement of activities, the cost of those assets is allocated over their useful lives and reported as depreciation expense. This is the amount by which capital outlay exceeded depreciation in the current period. Capital outlay Depreciation expense Disposal of capital assets Excess of capital outlay expense over depreciation Debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of debt principal is an expenditure in the governmental funds, but repayment reduces long-term liabilities in the statement of net position. Issuing debt increases long-term liabilities and does not affect the statement of activities. Repayment of principal

18,428 (12,120) (2,079) $4,229

4,185 4,185

Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the governmental funds. Amortization of bond premium Developer contributed capital Grants/notes receivable â€“ current net of allowance Subtotal

261 21,948 (91) 22,118

Internal service funds are used by management to charge the costs of certain activities, such as risk management, vehicle replacement and maintenance, information technology replacement and the print shop services. A portion of the revenue (expense) of certain internal service funds is reported with governmental activities. Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. OPEB Interest expense Compensated absences Subtotal Change in net position of governmental activities

878

(454) 13 83 (358) $ 29,973

The accompanying notes are an integral part of these financial statements.

GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE â€“ BUDGET AND ACTUAL Year Ended December 31, 2014 (in thousands)

Actual Amounts

Variance With Final Budget Positive (Negative)

Budgeted Amounts

REVENUES Property and ownership taxes Sales and use taxes Franchise fees Licenses and permits Intergovernmental Charges for services Recovered costs Fines and forfeitures Investment earnings Administrative services Miscellaneous Total revenues EXPENDITURES Current expenditures: Fund administration Legislative Judicial Management Legal Finance Human resources Public safety Public works Planning Information technology Total current expenditures Capital outlay Total expenditures EXCESS REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Transfer in Transfers out Total other financing (uses) NET CHANGE IN FUND BALANCE FUND BALANCE, BEGINNING FUND BALANCE, ENDING

Original

Final

$ 5,089 45,883 4,293 2,509 4,913 499 583 1,772 306 5,467 89 71,403

$ 5,007 48,071 4,459 2,771 4,731 499 583 1,733 262 5,755 89 73,960

1,878 295 1,026 4,442 1,609 3,254 1,272 20,608 19,857 2,594 3,216 60,051 36 60,087

1,176 5,847 2,026 4,301 1,626 20,595 22,157 2,964 3,200 63,892 37 63,929

1,156 4,130 1,937 4,644 1,388 20,250 21,443 2,799 2,849 60,596 45 60,641

20 1,717 89 (343) 238 345 714 165 351 3,296 (8) 3,288

11,316

10,031

19,814

9,783

170 (11,378) (11,208) 108 18,164 $ 18,272

170 (14,991) (14,821) (4,790) 25,675 $ 20,885

Total expenditures as presented on budgetary basis plus allocation of internal transfers Total expenditures as presented on GAAP basis

4,977 51,906 4,510 4,833 5,052 859 744 1,609 372 5,527 66 80,455

126 (14,768) (14,642) 5,172 25,675 $ 30,847 $ 60,641 (5,527) $ 55,114

The accompanying notes are an integral part of these financial statements.

(30) 3,835 51 2,062 321 360 161 (124) 110 (228) (23) 6,495

44 223 267 10,050 10,050

COMMUNITY DEVELOPMENT FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE â€“ BUDGET AND ACTUAL Year Ended December 31, 2014 (in thousands)

Variance With Final Budgeted Amounts Original

Budget

Final

Actual

Positive

Amount

(Negative)

REVENUES Intergovernmental Investment earnings Miscellaneous

Total revenues

668 20 115

511 11 243

(157) (9) 128

803

765

(38)

1,412

1,304

994

310

1,412

1,304

994

310

(229)

272

EXPENDITURES Current expenditures: Program costs Total expenditures DEFICIENCY OF REVENUES UNDER EXPENDITURES

(609)

(501)

OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing uses NET CHANGE IN FUND BALANCE FUND BALANCE, BEGINNING FUND BALANCE, ENDING

(80)

(410)

(413)

(3)

(35)

(365)

(368)

(3)

(644)

(866)

(597)

6,732

6,896

6,088

$ 6,030

$ 6,299

The accompanying notes are an integral part of these financial statements.

269 $

269

ARVADA CENTER FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE â€“ BUDGET AND ACTUAL Year Ended December 31, 2014 (in thousands)

Actual

Variance With Final Budget Positive

Amounts

(Negative)

Budgeted Amounts Final

Original REVENUES Intergovernmental revenues Scientific and Cultural Facilities District State and other local Charges for services Performing Arts Education Gallery/Museum Investment earnings Memberships and donations Miscellaneous

1,097 10

1,097 -

1,039 -

(58) -

4,464 1,050 164 1 452 144

4,351 1,050 164 462 257

3,525 1,009 159 25 284 122

(826) (41) (5) 25 (178) (135)

7,382

7,381

6,163

(1,218)

EXPENDITURES Current expenditures: Administration Performing Arts Development Marketing Education Patron Services Gallery/Museum Facilities Total expenditures

3,174 4,556 330 1,473 1,029 308 188 11,058

3,222 4,688 319 965 949 350 592 11,085

865 5,340 389 1,311 1,179 491 568 27 10,170

2,357 (652) (70) (346) (230) (491) (218) 565 915

DEFICIENCY OF REVENUES UNDER EXPENDITURES

(3,676)

(3,704)

(4,007)

(2,133)

3,683

3,979

296

3,683

3,979

296

Total revenues

OTHER FINANCING SOURCES Transfers in Total other financing sources

NET CHANGE IN FUND BALANCE

112

FUND BALANCE, BEGINNING FUND BALANCE, ENDING

119

The accompanying notes are an integral part of these financial statements.

(21)

(28)

(7)

646

625

618

(7)

PARKS FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE â€“ BUDGET AND ACTUAL Year Ended December 31, 2014 (in thousands)

Budgeted Amounts Original Final REVENUES Licenses and permits Intergovernmental revenues Jefferson County-Open Space Recovered costs Investment earnings Miscellaneous

Total revenues EXPENDITURES Current expenditures: Park maintenance Park design Total current expenditures

DEFICIENCY OF REVENUES UNDER EXPENDITURES OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources NET CHANGE IN FUND BALANCE

FUND BALANCE, ENDING

(3)

3,686 919 42 146

171 (59) 1 73

4,658

4,841

183

6,991 847

7,594 244

7,455 121

139 123

7,838

7,576

262

7,878

7,599

279

(3,220)

(2,758)

462

2,972 (3)

2,937 (24)

(35) (21)

2,969

2,913

(56)

(251)

3,988 $

3,515 978 41 73

(251)

FUND BALANCE, BEGINNING

3,515 978 41 73

Capital outlay Total Expenditures

Actual Amounts

Variance With Final Budget Positive (Negative)

3,737

4,300 $

The accompanying notes are an integral part of these financial statements.

4,049

155

406

4,300

4,455

406

PROPRIETARY FUNDS STATEMENT OF NET POSITION December 31, 2014 (in thousands)

Governmental Activities

Business-Type Activities

Water Fund ASSETS CURRENT ASSETS Cash and investments Cash with fiscal agent Accounts receivable, net of allowance for uncollectibles Accrued interest Inventories Prepaid costs Total current assets

36,866 37,086

Stormwater Fund

Wastewater fund

12,180 -

Golf Course

5,599 -

473 -

Total Business Type Activities

Food Service

611 -

55,729 37,086

Internal Service Funds

21,636 -

2,217 49 261 101 76,580

2,109 19 6 14,314

396 8 6,003

13 1 127 13 627

95 1 41 6 754

4,830 78 429 126 98,278

4 31 255 310 22,236

NONCURRENT ASSETS Land, water rights & construction in progress Property & equipment, net of accumulated depreciation Total non-current assets Total assets

38,663

8,540

4,230

51,450

128,331 166,994 243,574

43,754 43,771 58,085

37,693 46,233 52,236

3,249 7,479 8,106

836 836 1,590

213,863 265,313 363,591

6,434 6,434 28,670

LIABILITIES CURRENT LIABILITIES Accounts payable Accrued interest Contracts payable Accrued compensated absences

1,727 76 558 222

257 907 51

430 4

171 4 58

92 26

2,677 80 1,465 361

443 48

Serial bonds payable Claims payable Capital lease payable Unearned revenue Total current liabilities

1,909 4,492

1,215

434

151 128 512

7 125

1,909 151 135 6,778

1,680 114 2,285

NONCURRENT LIABILITIES Serial bonds payable Accrued compensated absences

10,570 222

10,570 365

Capital lease payable Total non-current liabilities Total liabilities

10,792 15,284

52 1,267

5 439

77 136 648

27 152

77 11,012 17,790

98 146 2,431

154,515 1,805 71,970 228,290

43,771 13,047 56,818

46,233 5,564 51,797

7,251 207 7,458

836 602 1,438

252,606 1,805 91,390 345,801

6,222 20,017 26,239

NET POSITION Net investment in capital assets Restricted - debt service Unrestricted Total net position

Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Net position of business-type activities (page 25) The accompanying notes are an integral part of these financial statements.

4,441 350,242

PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION Year Ended December 31, 2014 (in thousands) Governmental Activities

Business-Type Activities

Water Fund OPERATING REVENUES Sales Service charges & fees Recovered costs

Stormwater Fund

Waste-water fund

18,563 606 -

11,334 -

Golf Course

3,229 166

Food Service

1,653 2,763 -

1,404 -

Total Business Type Activities

Internal Service Funds

21,620 17,932 166

8,028 123

Contributions

7,384 2,186 189

Miscellaneous Total revenues

46 19,215

11,334

3,395

28 4,444

1,404

74 39,792

29 17,939

EXPENSES Operating & maintenance Administration Insurance premiums Uninsured damages & claims Repair & maintenance Depreciation Total expenses

15,232 1,057 3,849 20,138

9,127 708 1,204 11,039

1,125 760 1,885

4,378 140 4,518

1,362 49 1,411

31,224 1,765 6,002 38,991

4,518 1,725 7,276 2,509 1,613 17,641

OPERATING INCOME (LOSS)

(923)

295

1,510

(74)

(7)

801

298

NON-OPERATING REVENUES (EXPENSES) Investment earnings Gain (loss) on sale of assets Interest expense Amortization

464 (397) (493) 104

137 (629) -

69 (99) -

4 (5) (10) -

6 -

680 (1,130) (503) 104

260 137 (12) -

Total non-operating revenues (expenses)

(322)

(492)

(30)

(11)

(849)

385

INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS

(1,245)

(197)

1,480

(85)

(1)

(48)

683

CAPITAL CONTRIBUTIONS TRANSFERS IN TRANSFERS OUT

15,645 440 (448)

3,783 (288)

1,898 (1,071)

209 (4)

21,326 649 (1,811)

264 (3)

CHANGE IN NET POSITION

14,392

3,298

2,307

120

(1)

20,116

944

Employer Employee Retirees and continued benefit individuals

NET POSITION, BEGINNING NET POSITION, ENDING

213,898 $

228,290

53,520 $

56,818

49,490 $

Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Change in net position of business-type activities (page 27) The accompanying notes are an integral part of these financial statements.

51,797

7,338 $

7,458

1,439 $

25,295

1,438

66 20,182

26,239

PROPRIETARY FUNDS STATEMENT OF CASH FLOWS Year Ended December 31, 2014 (in thousands) Governmental Activities

Business-Type Activities

Cash flows from operating activities Cash received from external customers Cash received from internal customers Cash payments to external suppliers Cash payments to internal suppliers Cash payments to employees for services Net cash provided (used ) by operating activities Cash flows from non-capital financing activities Transfers to other funds Transfers from other funds Net cash provided (used ) by non-capital financing activities Cash flows from capital & related financing activities Capital contributions Purchase of capital assets Payment of capital lease Principal paid on capital debt Interest paid on capital debt Proceeds from sale of assets Net cash provided (used) by capital and related financing activities Cash flows from investing activities Investment earnings Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents January 1, 2014 Cash and cash equivalents December 31, 2014

Water Fund $ 19,127 (9,521) (565) (5,692) 3,349

Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) Adjustments to reconcile operating income to net cash provided (used by operating activities: Depreciation (Increase) decrease in account receivable (Increase) decrease in inventories (Increase) decrease in prepaid expenditures (Decrease) increase in accrued payroll (Decrease) increase in accounts payable (Decrease) increase in claims/bonds payable (Decrease) increase in contracts payable (Decrease) increase in unearned revenue (Decrease) increase in accrued benefits Net cash provided (used) by operating activities Non-cash investing, capital and financing activities Developer Contributions Amortization

Stormwater Fund

Wastewater fund $

11,267 (8,206) (361) (1,130) 1,570

3,337 (426) (9) (404) 2,498

Golf Course $

Total Business Type Activities

Food Service

4,459 (1,867) (311) (2,196) 85

1,445 58 (544) (81) (745) 133

39,635 58 (20,564) (1,327) (10,167) 7,635

Internal Service Funds $

283 17,657 (13,358) 44 (1,879) 2,747

(448) 440

(288) -

(1,071) -

(4) 209

(1,811) 649

(3) 264

(8)

(288)

(1,071)

205

(1,162)

261

10,167 (5,836) (1,760) (500) -

1,001 (1,195) -

(1,645) -

(14) (145) (13) -

11,168 (8,690) (1,905) (513) -

(1,665) (113) (12) 165

2,071

(194)

(1,645)

(172)

(1,625)

470 470 5,882 68,070 73,952

140 140 1,228 10,952 12,180

71 71 (147) 5,746 5,599

4 4 122 351 473

6 6 139 472 611

691 691 7,224 85,591 92,815

270 270 1,653 19,983 21,636

(923)

295

1,510

(74)

(7)

801

298

3,849 (88) (38) 20 56 453

760 (58) (3) 300 (11) 2,498

140 5 (11) (2) 16 (3) 10 4 85

49 98 (2) (3) 2 (10) 1 5 133

6,002 (110) (13) (43) 33 415 505 11 34 7,635

1,613 1 13 (28) (26) 872 4 2,747

$ $

1,898 -

$ $

10,158 104

$ $

20 3,349

1,204 (67) (2) 72 52 16 1,570

$ $

5,478 104

$ $

2,782 -

The accompanying notes are an integral part of these financial statements.

FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET POSITION December 31, 2014 (in thousands)

Defined Benefit Police Pension ASSETS Pooled cash & investments Local Government Investment Pool Accrued interest Accounts receivable Total assets

LIABILITIES Escrow payable Total liabilities

357 357

NET POSITION RESTRICTED FOR PENSIONS

The accompanying notes are an integral part of these financial statements.

357

Agency Fund

7,052 10 53 7,115

7,115 $ 7,115

FIDUCIARY FUNDS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION Year Ended December 31, 2014 (in thousands)

Defined Benefit Police Pension ADDITIONS Investment income Funding

1 20

Total additions

DEDUCTIONS Benefits paid Total deductions

29 29

NET DECREASE

(8)

NET POSITION RESTRICTED FOR PENSIONS BEGINNING OF YEAR

365

END OF YEAR

The accompanying notes are an integral part of these financial statements.

357

Notes to the Financial Statements

NOTES TO FINANCIAL STATEMENTS December 31, 2014

TABLE OF CONTENTS

Summary of Significant Accounting Policies A. Financial Reporting Entity........................................................................................... 43 Blended Component Units ................................................................................... 43 Discrete Component Units .............................................................................. 43-44 B. Government-Wide and Fund Financial Statements .............................................. 44-45 C. Financial Statement Presentation.......................................................................... 45-47 D. Assets, Liabilities, Deferred Inflows of Resources and Equity 1. Deposits and Investments .................................................................................... 47 2. Receivables and Payables ................................................................................... 48 3. Inventories and Prepaid Items ............................................................................. 48 4. Restricted Assets ................................................................................................. 48 5. Capital Assets ................................................................................................. 48-49 6. Compensated Absences ...................................................................................... 49 7. Long-Term Obligations ........................................................................................ 49 8. Deferred Inflows and Outflows of Resources ................................................. 49-50 9. Fund Equity ..................................................................................................... 50-51 10. Net Position ..................................................................................................... 51-52 11. Estimates ............................................................................................................. 52

Stewardship, Compliance and Accountability A. Budgetary Information ................................................................................................ 52 B. Expenditures/Expenses in Excess of Appropriation ................................................... 52 C. State Constitutional Amendment ........................................................................... 52-53

Detailed Notes on All Funds and Account Groups A. Deposits and Investments ..................................................................................... 54-57 B. Capital Assets ........................................................................................................ 58-59 C. Construction Commitments ........................................................................................ 59 D. Interfund Transactions ........................................................................................... 59-60 E. Long-Term Debt Revenue Bonds ............................................................................................... 61-62 Capital Lease Obligations ............................................................................... 63-64 Changes in General Long-Term Liabilities .......................................................... 64

NOTES TO FINANCIAL STATEMENTS December 31, 2014

Other Information A. Risk Management ....................................................................................................... 65 B. Commitments and Contingencies 1. Litigation ............................................................................................................... 66 2. Federal Grants ..................................................................................................... 66 3. AURA Commitments ....................................................................................... 66-67 C. Conduit Debt Obligation ........................................................................................ 67-68 D. Retirement Commitments 1. Defined Benefit Police Pension Plan .............................................................. 68-69 2. City of Arvada Retirement Plan â€“ Defined Contribution Plan ......................... 69-70 3. Defined Contribution Police Pension Plan ........................................................... 70 4. Executive Retirement Plan .............................................................................. 70-71 E. OPEB ..................................................................................................................... 71-72 F. Related Party Note ................................................................................................ 72-73 G. Subsequent Event ...................................................................................................... 73 H. GASB Statement 67 ................................................................................................... 73

NOTES TO FINANCIAL STATEMENTS December 31, 2014

1. Summary of Significant Accounting Policies This is a summary of significant accounting policies for the City of Arvada, Colorado presented to assist the reader in interpreting the financial statements and other data in this report. The policies are considered essential and should be read in conjunction with the accompanying financial statements. A. Financial Reporting Entity The City of Arvada is a political subdivision of the State of Colorado, located in Jefferson and Adams Counties in the northwest quadrant of the greater Denver, Colorado, metropolitan area. The population of the City is approximately 111,559. The City, incorporated in 1904, provides general government; police services; water; sewer, stormwater; golf; the Arvada Center for the Arts and Humanities; park maintenance; food service; and various trust and agency functions in a fiduciary capacity. The City does not provide fire protection, public education, or solid waste services. An elected mayor and six-member council govern the City. As required by accounting principles generally accepted in the United States of America (US GAAP) these financial statements present the City and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities are, in substance, part of the City's operations and data from these units are combined with data of the City. The discretely presented component units, on the other hand, are reported in separate columns in the government-wide statements to emphasize they are legally separate from the City. Each blended and discretely presented component unit has a December 31 year-end. Blended Component Units Arvada Housing Authority (Special Revenue Fund) â€“ The Authority administers funds received for rent subsidy to low/moderate income households under Section 8 of the U.S. Housing Assistance Payment Program. The City provides all administrative support to the Authority. The Authority, a legally separate entity, is governed by a Board of Directors, which consists of all current members of the Arvada City Council. Separate audited financial statements for the Arvada Housing Authority are not prepared. Arvada Council of the Arts and Humanities (Arts Council) (Special Revenue Fund) â€“ The Arts Council is a registered 501(c) (3) organization. Its role is to advise the Arvada City Council, provide guidance and support to the Arvada Center staff and act as an advocate for public support and funding for the Arvada Center. The Council is governed by a Board which is appointed by the Arvada City Council. Separate audited financial statements for the Arts Council are not prepared. Discrete Component Units Arvada Urban Renewal Authority (AURA) â€“ AURA is reported in a separate column as a discrete component unit presentation to emphasize that it is legally separate from the City. AURA was created by Ordinance No. 1717 under the Colorado Urban Renewal Law and was approved by the voters on March 3, 1981. Its purpose is to develop, redevelop or rehabilitate blighted areas of the City. AURA currently has five active project areas, Ralston Fields, Jefferson Center Metropolitan District (JCMD), Village Commons, Olde Town Station and Northwest Arvada. The governing body of the AURA is a commission of seven members, appointed by the Mayor and approved by City Council for staggered terms of five years. AURA's annual budget must be approved by the City Council and the City provides administrative support to AURA. 43

NOTES TO FINANCIAL STATEMENTS December 31, 2014

AURA is included in the City's financial statements due to the City's ability to appoint AURA's governing authority and approve the budget and its revisions. The City does not have any responsibilities to fund AURA operating deficiencies or deficits. Tax revenues are imposed and collected by the City. Separate audited financial statements for AURA may be obtained from the City. Arvada Economic Development Association (AEDA) â€“ AEDA is reported in a separate column as a discrete component unit presentation to emphasize that it is legally separate from the City. AEDA financial statements consist of one governmental fund. AEDA was established to encourage and stimulate all forms of economic development, commercial and industrial. The services provided by AEDA benefit both the City and citizens by providing information and services to existing and prospective businesses and industries. Funding for AEDA consists of compensation from the City for services it renders the City and its citizens. The City also provides administrative support for AEDA. A Board of Directors appointed by City Council governs AEDA. The City has implemented GASB Statement 61, The Financial Statement Reporting Entity: Omnibus- An Amendment of GASB Statements No. 14 and No. 34, and we believe that AEDA is included as a discrete component unit in the City's financial statements for the following reasons: the City funds all of the operations of AEDA, and the City Council appoints six members of the board. B. Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all the non-fiduciary activities of the City and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which are normally supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the City is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major enterprise funds are reported as separate columns in the fund financial statements.

NOTES TO FINANCIAL STATEMENTS December 31, 2014

Measurement Focus and Basis of Accounting The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and trust fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Government fund financial statements are reported using the current financial resources measurement focus and modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and judgments, are recorded only when payment is due. Taxes, franchise fees, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government. Agency funds use the accrual basis of accounting. C. Financial Statement Presentation The accounts of the City are organized and operated on the basis of funds, each of which is considered a separate accounting entity. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts that comprise its assets and deferred outflows of resources, liabilities and deferred inflows of resources, fund equity, revenues and expenditures or expenses as appropriate. The various funds are summarized by type within the financial statements. The City reports the following major governmental funds: The General Fund is the Cityâ€™s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Community Development Fund accounts for all entitlements, revenues and expenditures of the Community Development Block Grants (CDBG) program, the Home Rehabilitation program and Essential Home Repairs program. The Arvada Center Fund accounts for all revenues and expenditures related to performing arts, development, marketing, education and gallery at the Arvada Center. Sources of revenue include grants, charges for services and transfers from the Cityâ€™s General Fund.

The Parks Fund accounts for costs associated with the acquisition, design, development, maintenance and beautification of parks, open space and trails within the City. Revenues are derived from the Cityâ€™s General Fund, Grants Fund, Lands Dedicated Fund and Jefferson County Open Space funds. 45

NOTES TO FINANCIAL STATEMENTS December 31, 2014

The General Capital Projects Fund accounts for all major capital projects of the City. Appropriations are not restricted to a fiscal year. Sources of revenue to this fund are transfers from contributions from the General and other funds, interest earned, transfers from Jefferson County Open Space funds and contributions by developers and government grants. The City reports the following major proprietary funds: The Water Fund accounts for all activity within the scope of water utility operations. Water service is available within the City limits and is extended to some residents of the county and adjacent cities. All activities necessary to provide such service are accounted for in this fund, including administration, operations, capital water projects, maintenance, financing and related debt service, and billing and collection. The Wastewater Fund accounts for all activities necessary in the collection, transmission, and disposal of sewage and wastewater. It includes administration, operations, capital maintenance, financing and billing and collection. The Stormwater Fund accounts for all activities necessary to maintain a stormwater management plan. It includes administration, operations, capital maintenance and billing and collection. The Food Service Fund accounts for all revenue and expenses associated with food service activities including the operation of banquet facilities at the Arvada Center for the Arts and Humanities and offsite catering. Government fund types that do not meet the criteria of major funds have been summarized and presented as other governmental funds and within the fund financial statements. Additionally, the City reports the following fund types: Internal Service Funds are used to account for the City’s fleet and information technology replacement, risk management insurance program, self-funded medical insurance, printing services and building and fleet maintenance services. The City reports the following fiduciary funds: The Pension Trust Fund is used to account for the City’s defined benefit police pension trust to provide retirement benefits for one retiree that did not elect to join the new plan formed in 1986. Agency Fund is used to account for a variety of deposits from various sources held in escrow. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this rule are the charges between the City’s enterprise operations and various other functions. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. Operating expenses for enterprise and internal service funds include cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

NOTES TO FINANCIAL STATEMENTS December 31, 2014

When both restricted and unrestricted resources are available, it is the Cityâ€™s practice to use restricted resources first, then unrestricted resources as they are needed. D. Assets, Liabilities, Deferred Inflows of Resources and Equity 1) Deposits and Investments The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. The City pools cash resources of most funds to facilitate the management of cash. Cash applicable to a particular fund is readily identifiable. The balance in the pooled cash accounts is available to meet current operating requirements. Cash in excess of current requirements is invested in various interest-bearing securities and disclosed as part of the City's investments. Cash overdrafts from pooled cash and investments are reported as an interfund receivable/payable. Colorado statutes require that the City use an eligible public depository as defined by the Public Deposit Protection Act (PDPA). Under the Act, the depository is required to pledge a pool of eligible collateral having a market value at all times equal to at least 102% of the aggregate public deposits held by the depository not insured by Federal Depository Insurance. The pool for all the uninsured public deposits as a group is to be maintained by another institution or held in trust. Each institution designated as a public depository can be assessed a portion of the losses of a public entity's deposits in a failed public depository. Thus, all public deposits are fully collateralized. Eligible collateral as defined by the Act primarily includes obligations of, or guaranteed by, the U.S. Government, the State of Colorado or any subdivision thereof and obligations evidenced by notes received by first lien mortgages or deeds of trust on real property. Investments are reported at fair value. The fair value of the Cityâ€™s investments is based upon values provided from quoted market prices.

NOTES TO FINANCIAL STATEMENTS December 31, 2014

2) Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "interfund receivables/payables" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds". On the Statement of Net Position, residual balances between governmental and business type activities are reflected as internal balances. Receivables are shown net of an allowance for uncollectibles, where applicable. Property taxes attach an enforceable lien on the property as of January 1 and are levied on the following January 1. Taxes are payable the following year in one installment made on or before April 30, or in two installments made on or before February 28 and June 15. The assessments and collections are made by Jefferson County and Adams County and are remitted monthly to the City. City property tax revenues certified in December are recorded as a receivable and an offsetting deferred inflow of resources. The City records non-current receivables for interfund and other long-term notes on the Statement of Net Position of its Proprietary Fund Types. Within the governmental funds, all non-current receivables are fully offset by deferred inflow of resource if the payment resulting in the receivable was originally recorded as an expenditure. Otherwise non-current receivables are fully offset by a restriction of fund balance. Non-current receivables and other long-term notes are shown on the statement of net position of the government-wide statements. 3) Inventories and Prepaid Items Inventories are valued at cost using the first-in/first-out (FIFO) method with the exception of the City's central supply inventory which is valued at average cost. The cost of inventories is recorded as expenditures when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid costs in both government-wide and fund financial statements. 4) Restricted Assets The City first applies restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position are available. Certain assets of the Community Development Block Grant special revenue fund are restricted because their use is completely restricted by grant agreements. Certain assets of the Arvada Center special revenue fund are restricted because their use is restricted by actor agreements, endowments or donor restrictions. Certain assets of the Capital Projects fund are restricted because their use is restricted for use by specified projects. 5) Capital Assets Capital assets which include property, plant, equipment, and all infrastructure assets (e.g. roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities column in the government-wide financial statements and in the Proprietary funds in the fund financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of three years. Such assets are recorded at historical costs or estimated historical 48

NOTES TO FINANCIAL STATEMENTS December 31, 2014

cost if purchased or constructed. Donated assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Capital assets other than land and water rights are depreciated. Depreciation is computed using the straight-line method with estimated useful lives as follows: Assets Buildings Road system infrastructure Other improvements Other infrastructure Equipment Vehicles

Years 50 25 20 8-50 5-10 3-5

6) Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. No liability is reported for unpaid accumulated sick leave since benefits are not paid upon termination. Vacation pay is accrued when earned in the government-wide and proprietary fund financial statements. The compensated absences are only reported in governmental funds if they are due. Compensated absences of the governmental activities are expected to be liquidated primarily with revenues of the General Fund. 7) Long-Term Obligations In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Debt premiums and discounts are deferred and amortized over the life of the debt using the straight line method. Debts payable are reported net of the applicable debt premium or discount. In the fund financial statements, governmental fund types recognize debt premiums and discounts, as well as debt issuance costs, during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

8) Deferred Inflows and Outflows of Resources A deferred inflow of resources is an acquisition of net position that is applicable to a future reporting period. A deferred outflow of resources is a consumption of net position that is applicable to future reporting period. The City did not have a deferred outflow of resources during 2014. Under the modified accrual basis of accounting, revenues and other fund financial resources are recognized in the period in which they become measurable and available. Assets recorded in the fund financial statements in which revenues are not available are recorded as a deferred inflow of resources. Property tax receivables are reported as a deferred inflow of resources when levied in the government activity and fund statements. 49

NOTES TO FINANCIAL STATEMENTS December 31, 2014

Deferred inflows of resources include grants receivable and notes receivable that are unavailable in the fund statements but are recognized as revenue in the government-wide statements. 9) Fund Equity The City previously adopted the standards of Governmental Accounting Standards Board Statement No. 54, Fund Balance Reporting and Government Fund Type Definitions (GASB 54), for the year ending December 31, 2011. This Statement defines the different types of fund balances that a governmental entity must use for financial reporting purposes. The classifications are designed based on the relative strength of the constraints that control how specific amounts can be spent, or the inability to be spent such as inventories and prepaids. When expenditures are incurred that use funds from more than one classification, the City will generally determine the order which the funds are used on a case-by-basis basis, taking into account any application requirements or grant agreements, contracts, business circumstances or other constraints. If no other constraints exist, the order of spending of resources will be restricted, committed, assigned and lastly, unassigned. GASB 54 requires the fund balance amounts to be properly reported within one of the fund balance classifications listed below: 1. Nonspendable - fund balance associated with inventories, prepaids, long-term loans and notes receivable (unless the proceeds are restricted, committed or assigned) 2. Restricted – fund balance that can be spent only for specific purposes stipulated by constitution, external resource providers or through enabling legislation. 3. Committed – fund balance that is subject to a purpose constraint imposed by formal action of the City Council. The City Council is the highest level of decision-making authority for the City. Commitments may be established, modified or rescinded through resolutions and ordinances approved by the City Council, both require the same level of action to add or remove the constraint. 4. Assigned – fund balance that is intended for use established by the City, but are not considered restricted or committed. The financial policies and guidelines authorize the assignment of fund balances by informal action of City Council (no ordinance or resolution) or by the City Manager. 5. Unassigned – fund balance that is the residual classification that does not meet any of the other classifications and is used for the General Fund.

NOTES TO FINANCIAL STATEMENTS December 31, 2014

The following table illustrates the current fund balance amounts associated with each major fund and the non-major funds in the aggregate: General Fund $ 352 353 705

Community Development Fund $ -

Arvada Center Fund $ 38 38

2,248 2,248

23 1,446 1,469

Committed Capital - Arvada Center Capital - General Capital - Parks Capital - Streets Capital - Traffic Total Committed

Assigned Capital - Arvada Center Capital - General Capital - Parks Capital - Streets Capital - Traffic Community Development Parks Arvada Center 2015 Budget

Fund Balances: Nonspendable: Inventories Prepaid Total Nonspendable Restricted: Conservation Trust Voter restricted sales tax - police Seizure Funds Emergencies - Tabor Donor intentions Community Development Debt Service Lands Dedicated Adams County Open Space Adams County Transportation Park Development Fees Scholarships & Grants Letter of Credit Total Restricted

Total Assigned Unassigned Total Fund Balances

8 32 40

Capital Projects Fund $ 12 12

Other Governmental Funds $ 18 18

Total Governmental Funds $ 360 453 813

179 58 156 36 429

145 145

65 215 536 1,316 2,132

1,849 7,165 439 286 435 2,694 12,868

1,849 7,165 439 2,946 58 1,446 435 2,694 215 536 1,316 156 36 19,291

218 16,272 3,086 1,532 1,656 22,764

2,598

4,830 -

151 -

4,270 -

292 7,817 1,987 1,051 3,054 -

292 7,817 1,987 1,051 3,054 4,830 4,270 151 2,598

2,598 25,296 30,847

4,830 6,299

151 618

4,270 4,455

14,201 $ 39,109

12,886

26,050 25,296 94,214

Parks Fund $

10) Net Position Net position represents the difference between assets plus deferred outflows of resources, and liabilities plus deferred inflows of resources. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used for the acquisition or construction of improvements of those assets. Net position is reported as restricted when there are limitations imposed on its use either through the enabling legislation adopted by the City or through external restriction imposed by creditors, grantors, laws, or regulations of other governments.

NOTES TO FINANCIAL STATEMENTS December 31, 2014

In November, 1992, Colorado voters passed Article X, Section 20 to the State Constitution, described in Note 2B. The Amendment requires that a percentage of fiscal year spending, excluding bonded debt service, be legally restricted to be used for declared emergencies only. This amount is reflected on the government-wide statement of net position as net position â€“ reserved for emergencies. The amendment requires a three percent emergency reserve at December 31, 1995 and thereafter. An emergency is defined in the Amendment as an event, which excludes economic conditions, revenue shortfalls, salary or fringe benefit increases. 11) Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. 2. Stewardship, Compliance and Accountability A. Budgetary Information Annual budgets are adopted on a basis consistent with US GAAP for all governmental funds except the capital projects fund, which adopts project-length budgets. All other annual appropriations lapse at fiscal year-end. The General Fund expenditures are budgeted on a nonGAAP basis due to the allocation of internal transfers. Proprietary Funds are budgeted on a nonGAAP basis due to the budgeting of capital outlay and not depreciation. Budgetary financial statements do not include the general Capital Projects Fund because the projects accounted for in that fund often span multiple years. Budgets are also not adopted for the Fiduciary funds. Not less than sixty days prior to the first day of the next fiscal year, Council adopts the City budget by resolution and the annual appropriation by ordinance. The City prepares a combination line item and program budget, but the level of control is at the fund level which is the amount approved by ordinance. For budgetary, appropriation and reporting purposes, interfund transfers are considered to be revenues or expenditures. Both the adopted budget and the level of appropriation (by fund) can be amended during the budget year. This action requires Council approval in the form of a resolution for a budgetary amendment and by ordinance requiring a public hearing for an increase in appropriations. Intrafund budgetary transfers between departments within a fund can be accomplished with the approval of the Manager. B. Expenditures/Expenses in Excess of Appropriation For the year ended December 31, 2014, the Insurance Fund expenditures exceeded the amounts budgeted by $41,000 which may be a violation of Colorado budget law. This over-expenditure is due to year end estimated incurred but not recorded claims expense. The Arvada Medical Fund expenditures exceed the budgeted amount, however the City does not adopt an annual budget for the Medical Fund. C. State Constitutional Amendment On November 3, 1992, the voters of the State approved Article X, Section 20 to the State Constitution (the Amendment) limiting growth of public entities and their ability to borrow and tax.

NOTES TO FINANCIAL STATEMENTS December 31, 2014

Enterprises, defined as government-owned businesses authorized to issue revenue bonds and receiving less than 10% of its annual revenue in grants from all state and local governments combined, are excluded from the provisions of the Amendment. The City's management is of the opinion that itâ€™s Water, Wastewater, Stormwater, Golf and Food Service operations qualify for this exclusion. The initial revenue base is 1992 fiscal year spending. Future revenue limits are determined based upon the prior year's fiscal year spending adjusted for a growth factor based upon inflation and changes in the actual value of real property within its boundaries. Excluded revenues such as gifts and federal funds are not used to calculate the limit. Revenue in excess of the limit must be refunded unless the voters approve retention of such revenue. On November 5, 1996, the qualified electors of the City approved Resolution R-96-127, which reads as follows: Without creating any new tax or increasing any current taxes, shall the City of Arvada be permitted, in 1996 and each year thereafter, to retain and spend City revenues in excess of the spending, revenue raising, or other limits in Article X, Section 20 or the Colorado Constitution, utilizing such revenues for public safety, municipal services, transportation and other public improvements, parks and recreational facilities, and any other lawful public purpose?

The Amendment requires, with certain exceptions, voter approval prior to imposing new taxes, increasing a tax rate, imposing a mill levy that will produce property tax revenue in excess of the amount collected in the previous year adjusted by the growth factor, extending an expiring tax, or implementing a tax policy change which directly causes a net tax revenue gain. Except for bond refinancing at lower interest rates or adding employees to existing pension plans, the Amendment specifically prohibits the creation of multiple fiscal year debt or other financial obligations without voter approval and without irrevocably pledging present cash reserves for all future payments. The City believes it is in compliance with the requirements of the Amendment. However, due to the broad general terms of the Amendment, the City has been required to make certain interpretations of the Amendment's language in order to determine its compliance. Ultimately, the courts may be required to determine the appropriate interpretations of the Amendment's terms and provisions.

NOTES TO FINANCIAL STATEMENTS December 31, 2014

3. Detailed Notes on Funds and Account Balances A. Deposits and Investments As of December 31, 2014, the City's cash deposits had a carrying value of $24,222,812. The bank balances were $24,380,730 of which $1,000,000 was covered by federal deposit insurance and $23,380,730 was collateralized with securities held by the pledging financial institution’s trust department or agent in the City’s name. Cash with fiscal agent had a balance of $41,594,027. These funds are held in escrow for the Gross Reservoir Enlargement project with Denver Water and the Olde Town Transit Hub project with the Regional Transportation District. These funds are invested in instruments which follow the City’s investment policies and procedures. Investment policies are governed by the City’s investment policies and procedures and State Statutes. Investments of the City and AEDA may include: • •

• • • • •

Local government investment pools authorized under the laws of the State of Colorado whose investment policy closely mirrors that of the City. Direct obligations of the United State government, including such instruments as Treasury Bills, Treasury Notes, Treasury Bonds, Export Import Bank issues, Farmers Home Administration Insured Notes, certain scaled discount notes, and certain relatively shortterm securities issued by the Government National Mortgage Association. Obligations of certain U.S. Government agencies, including but not limited to such instruments as Federal Home Loan Bank debt, Federal National Mortgage Association debt, certain scaled discount notes, and/or certain short-term Federal Farm Credit debt. Purchases of the direct or agency securities mentioned above, under the terms of a repurchase agreement or in support of a City “Sweep Account” which meet the City’s procedures for the delivery, possession and safekeeping of investment securities. Repurchase agreements Commercial paper and certificates of deposits AAA-rated money market funds

Investments of the employee pension plans are determined contractually with the third-party custodian. The plans currently contain a wide range of money market and mutual funds and are not subject to the City’s investment policies. Interest Rate Risk The City’s investment policy does not specifically address Interest Rate Risk. The State Statutes requires 3 or 5 years depending on the investment. In practice, the City does not purchase any investments with a maturity of longer than 5 years with all “money market instruments” having a maturity of one year or less. The City assumes its investments will be held to maturity and callable investments may or may not be called. Credit Risk The City’s general investment policy is to apply the prudent-person rule: Investments are made as a prudent person would be expected to act, with discretion and intelligence, to seek reasonable income, preserve capital, and, in general, avoid speculative investments. The State Statutes specify rating requirements depending on the investment. All corporate bonds have AA or higher ratings. Concentration of Credit Risk As a means of limiting its exposure, the City’s total investment in any specific money market or mutual fund shall not exceed 10% of the total assets of such fund class. At December 31, 2014, the City's investments in the Federal Home Loan Bank (FHLB), Federal Home Loan Mortgage 54

NOTES TO FINANCIAL STATEMENTS December 31, 2014

Corporation (FHLMC), Federal National Mortgage Association (FNMA), and Federal Farm Credit Bank (FFCB) are 34.33%, 20.69%, 5.99% and 20.07% of total investments, respectively. Custodial Credit Risk Custodial credit risk is the risk that in the event of a bank failure, the government’s deposits may not be returned to it. The City’s investment policy requires commercial banks and savings and loan associations to be eligible public depositories within the meaning of the Colorado Revised Statues of PDPA and S&L PDPA. The depositories will also have to possess overall financial strength, capitalization and liquidity to ensure the safety and availability of such monies. The assessment of this overall financial strength shall be made applying generally accepted industry standards (i.e. capital requirements, asset quality, earnings and liquidity) using available public agency and private rating services as appropriate. Local Government Investment Pool At December 31, 2014, the City had invested in the Colorado Local Government Liquid Asset Trust (Colotrust) and the Colorado Surplus Asset Fund Trust (CSAFE). These investment vehicles were established for local government entities in Colorado to pool surplus funds. The State Securities Commissioner administers and enforces the requirements of creating and operating these pools. Their operation is similar to a money market fund with each share equal in value to $1.00. Investments of these entities are limited to those allowed by State statutes. A designated custodial bank provides safekeeping and depository services in connection with the direct investment and withdrawal functions. Substantially all securities owned are held by the Federal Reserve Bank in the account maintained for the custodial bank. The custodian's internal records identify the investments owned by the participating governments. Money Market Funds As of December 31, 2014, the City invested in the PFM Funds Prime Series, Colorado Investors Class, a money market mutual fund (marketed as the Colorado Statewide Investment Program or CSIP). The Prime Series is a separate investment portfolio of PFM Funds (the Trust). The Trust is an open-ended, diversified, management investment company registered under the Investment Company Act of 1940. The PFM Funds Prime Series invests in obligations of the United States Government and its agencies, high quality debt obligations of U.S. companies and obligations of financial institutions and is rated AAAm by Standard & Poor’s. PFM Asset Management, LLC serves as the investment advisor, administrator and transfer agent. Shares of the Fund are distributed by PFM Fund Distributors, Inc., member Financial Industry Regulatory Authority (FINRA). U.S. Bank N.A. serves as the custodian and acts as safekeeping agent. Cash and Investments reported on the financial statements as of December 31, 2014: Cash and Investments Cash with Fiscal Agent Restricted Cash Total per Statement of Net Position

$ 164,512 41,595 1,897 $ 208,004

Agency Fund Police Pension Defined Benefit Total Financial Statement Cash & Investments

7,052 357 $ 215,413

Carrying value of cash Cash with Fiscal Agent Fair market value of investments Total value cash and investments

24,223 41,594 149,596 $ 215,413

NOTES TO FINANCIAL STATEMENTS December 31, 2014

AURA Investment Policy AURA is required to comply with State statutes which specify instruments meeting defined rating, maturity, and concentration risk criteria in which units of local government may invest. In addition, AURA has an investment policy in which seeks to ensure the preservation of capital in the overall portfolio. Per AURA’s investment policy, funds of AURA may be invested in: • U.S. Treasury Securities. • Obligations of the U.S. Government agencies (including FDIC and FSLIC insured transactions up to $100,000). • Certificates of deposit and other evidences of deposit or investment at banks, savings and loan associations and other state or federally regulated financial institutions subject to PDPA (5%) and a minimum net worth of any bank of $10,000,000 and a minimum net worth of any savings and loan association of $15,000,000. • Repurchase agreements made in compliance with Revised Colorado State Statute 24-36113. Repurchase collateral will be perfected and delivered to the Trustee. Repurchase agreements must be collateralized at a minimum of 100% of the purchase price of the repurchase agreement and market-to-market on a weekly basis. All repurchase agreements shall be evidenced by a master repurchase agreement between AURA and securities dealer. • Money market funds. Investments with any financial institutions which have appeared in any published watch list during a 12-month period preceding the investment date in an amount greater than $100,000 is specifically prohibited. AURA's investment policy follows State statutes, but places additional limits on investment maturities and custodial credit risk. Interest Rate Risk – AURA's investment policy limits the maturity of investment instruments or fixed-income securities to a maximum of three years except for reserve funds which are invested subject to agreements tailored to bond indentures, when applicable. Credit Risk – State statutes limit investments in money market funds to those that maintain a constant share price, with a maximum remaining maturity in accordance with Rule 2a-7, and either have assets of one billion dollars or the highest rating issued by a nationally recognized organization that regularly rates such obligations. At December 31, 201, AURA's investment in the Dreyfus Government Cash Management money market fund of $2,351,462 was rated AAA by Moody’s and have a weighted average maturity of less than one year. Custodial Credit Risk – AURA's investment policy requires that investments be placed with two or more financial institutions and in such amounts or proportions of total investments or assets as may be reasonable and prudent. Concentration of Credit Risk – State statutes generally do not limit the amount AURA may invest in one issuer.

NOTES TO FINANCIAL STATEMENTS December 31, 2014

As of December 31, 2014, the City had the following investments and maturities: Investment Maturities >1 yr >2 yrs >3 yrs and and and <= 2 yrs. <= 3 yrs. <= 4 yrs.

>4 yrs and <= 5 yrs.

Asset Category

Credit Quality

Fair Value

<= 1 year

Local Government Investment Pool Trust Funds

AAAm

21,280,372

14.23%

AAA AAA AAA AAA

51,360,390 30,944,637 8,965,311 30,031,189 121,301,527

2,033,813 4,998,452 7,032,265

4,984,665 7,974,959 10,984,170 23,943,793

20,864,962 22,969,679 5,973,141 9,073,979 58,881,760

18,513,336 2,992,170 4,974,588 26,480,094

4,963,615 4,963,615

34.33% 20.69% 5.99% 20.07%

AAAm

1,013,883

0.68%

AA+

5,999,716

4,504,079

1,495,637

4.01%

U.S. Agencies FHLB FHLMC FNMA FFCB Subtotal for U.S. Agencies

Money Market Corporate Bonds Total for all Asset Categories

149,595,498

29,326,521 28,447,872 60,377,397 26,480,094 19.60% 19.02% 40.36% 17.70%

% of total

4,963,615 3.32%

100.00%

As of December 31, 2014 AURA’s cash deposits had carrying values of $1,299,579. The bank balances were $1,325,382 of which $500,000 was covered by the federal deposit insurance and $825,382 was collateralized with securities held by the pledging financial institution’s trust department or agent in AURA’s name. As of December 31, 2014 AEDA’s cash deposits had carrying values of $579,836. The bank balances were $579,836 of which $579,836 was covered by the federal deposit insurance.

NOTES TO FINANCIAL STATEMENTS December 31, 2014

B. Capital Assets A summary of changes in capital asset activity for the year ended December 31, 2014 follows (in thousands): Balance January 1, 2014 Primary Government: Governmental activities Capital assets not being depreciated: Land Construction in progress Total capital assets, not being depreciated Capital assets, being depreciated: Buildings Improvements other than buildings Equipment & Vehicles Infrastructure Total capital assets being depreciated Less accumulated depreciation for: Buildings Improvements other than buildings Equipment & vehicles Infrastructure Total accumulated depreciation Total capital assets, being depreciated, net Governmental activities capital assets, net

$ 53,259 21,975 75,234

18,358 18,358

(1,987) (1,987)

26 1,742 21,972 23,740

(17,093) (22,528) (18,227) (259,482) (317,330)

(712) (3,486) (1,738) (7,797) (13,733)

832 832

218,186

10,007

(168)

$ 293,420

$ 28,365

$ 31,342 8,170 11,301 50,813

Additions

3,550 3,550

Capital assets, being depreciated: Buildings Improvements other than buildings Equipment & vehicles Infrastructure Total capital assets being depreciated

15,017 268,433 3,346 7,155 293,951

15,296 15,296

Less accumulated depreciation for: Buildings Improvements other than buildings Equipment & Vehicles Infrastructure Total accumulated depreciation

(7,865) (80,424) (2,395) (483) (91,167)

(288) (5,354) (217) (143) (6,002)

Total capital assets, being depreciated, net

202,784

9,294

$ 253,597

$ 12,844

Business-type activities capital assets, net

Retirements

34,078 85,937 25,136 390,365 535,516

Balance January 1, 2014 Business-type activities Capital assets not being depreciated: Water rights Land Construction in progress Total capital assets, not being depreciated

Additions

Transfers To (From) CIP

(2,155)

(11)

Retirements

(1,915) (71) (1,986)

31,342 8,170 11,938 51,450

15,017 284,629 3,297 7,155 310,098

(8,153) (84,904) (2,552) (626) (96,235)

2,826 $

319,619

Balance December 31, 2014

(11) (11)

(1,041) (1,139)

(2,815) (2,815)

244,904

2,815 22 2,837

874 71 945

(17,805) (26,011) (19,124) (267,279) (330,219)

16,879 $

53,575 21,140 74,715 42,786 92,935 25,998 413,404 575,123

3 9 12

Transfers To (From) CIP

(98) (98)

8,708 7,041 51 1,067 16,867

(69) (931) (1,000)

316 (17,206) (16,890)

Balance December 31, 2014

213,863 $

265,313

NOTES TO FINANCIAL STATEMENTS December 31, 2014

Depreciation expense was charged to functions/programs of the primary government as follows (in thousands): Governmental Activities Business-Type Activities General government $ 2,018 $ Public safety – police & judicial 113 Public works 9,072 Parks 604 Culture 313 Internal Service 1,613 Water 3,849 Wastewater 1,204 Stormwater 760 Golf 140 Food 49 Total depreciation expense $ 13,733 $ 6,002 C. Construction Commitments The City has active construction projects as of December 31, 2014. The projects include streets, traffic, parks, general construction and water and wastewater system projects. At year end the City’s commitments with contractors are as follows (in thousands):

Streets construction Parks construction General Construction Traffic Construction Wastewater System Water system Total

Project Spent-to-Date $ 546 2,321 416 257 226 1,891 $ 5,657

Remaining Commitment $ 376 2,462 6,064 13 684 1,870 $ 11,469

D. Interfund Transactions There was one “due from” and one “due to” balance as of December 31, 2014. The Arvada Housing Authority owes the General Fund $11,928 for expenditures paid on its behalf. Transfers to/from other funds for the year ended December 31, 2014 were as follows (in thousands): Fund

Transfers In

General Fund Community Development Fund Arvada Center Parks Capital Projects Fund Non-major Governmental Funds Water Fund Wastewater Fund Stormwater Fund Golf Course Fund Internal Service Funds Total

Transfers Out

126 45 3,979 2,937 7,735 2,116 440 209 264

$ 14,768 413 24 277 555 448 288 1,071 4 3

$17,851

NOTES TO FINANCIAL STATEMENTS December 31, 2014

The General Fund transfers out include support transfers to the Arvada Center, Parks, Community Development and Golf Course Funds, a capital transfer to the Capital Projects Fund, debt transfers to the Bond and COP Funds, transfers to the Building Fund are in support of operations. The Community Development Fund transfer in is from the General Fund to support operations and the transfer out is to the Housing Fund to offset administrative costs. The Arvada Center Fund transfer in is from the General Fund to support on-going operations. The Parks Fund transfer in is from the General Fund to support operations. The transfer out is to the building and vehicle funds to support operations. This year the General, Grants, Community Development and Water funds made transfers into the Capital Projects Fund. Transfers out of the Capital Projects fund included a transfer to the Grants fund and the Police Tax Increment .21 fund. The Water Fund transfers out are to the Capital Projects fund for a non-enterprise asset and to Internal Service funds support operations. The transfers in are from the Wastewater fund. The Wastewater Fund transfers out are to the Water Fund. The Stormwater Fund transfers out are to the Wastewater Fund and the Bond Fund. The Golf Course Fund transfers in are from the General Fund to support operations. The transfers out are to the Building Fund. The Internal Service Funds transfers in are in support of energy payments in the Building Fund, and to the Medical and Vehicle Funds in support of operations. Transfers out are for capital projects.

NOTES TO FINANCIAL STATEMENTS December 31, 2014

E. Long-Term Debt Revenue Bonds Governmental Activities Series 2009 Sales and Use Tax Refunding Revenue Bonds The City advance refunded $12,975,000 and $8,250,000 of 1998 and 1999 Sales and Use Tax Refunding Revenue Bonds, respectively, with an issuance of $19,885,000 of Sales and Use Tax Refunding Bonds dated July 1, 2009, with interest rates varying from 2.5% to 4.0% payable semi-annually on June 1 and December 1. The advance refunding was completed in order to realize interest savings. Bonds outstanding and related interest requirements as of December 31, 2014, are as follows (in thousands): Year Ending December 31 2015 2016 2017 2018

Principal 1,990 2,045 2,105 3,885

Total

$ 10,025

Interest 340 280 219 155

Total 2,330 2,325 2,324 4,040

$ 994

$11,019

Series 2013 Sales and Use Tax Refunding Revenue Bonds On April 1, 2013, the City advance refunded $7,625,000 of the Series 2003 Sales and Use Tax Refunding Bonds by the issuance of $6,800,000 of Sales and Use Tax Refunding Revenue Bonds dated April 1, 2013 with interest rates ranging from 2.0% to 5.0% payable semi-annually on June 1 and December 1. The bonds mature beginning in 2013 and continue through 2017. Bonds outstanding and related interest requirements as of December 31, 2014, are as follows (in thousands): Year Ending December 31 2015 2016 2017 Total

Principal 1,385 1,440 1,510

Interest 203 148 75

Total 1,588 1,588 1,585

$4,335

$ 426

$4,761

The 2013 and 2009 Sales and Use Tax Refunding Revenue Bonds are payable solely from the Cityâ€™s 3% sales and use tax. The sales and use tax revenues allocated for repayment of these bonds is deposited separately into the Debt Service Fund. During the year ended December 31, 2014, revenues of $55,154,257 were available to pay annual debt service of $3,906,075.

NOTES TO FINANCIAL STATEMENTS December 31, 2014

Business-Type Activities Series 2009 Water Enterprise Revenue Refunding Bonds On April 24, 2009 the City currently refunded $22,615,000 of 2001 Variable Rate Demand Water Enterprise Bonds, with the issuance of $21,745,000 of Water Enterprise Revenue Refunding bonds dated May 1, 2009 with interest ranging from 2.0% to 5.0% payable semiannually on May 1 and November 1. The bonds mature beginning in 2009 and continue through 2020. Annual debt service requirements for the outstanding bond at December 31, 2014, are as follows (in thousands):

Year Ending December 31 2015 2016 2017 2018 2019 2020

Principal 1,805 1,860 1,915 2,010 2,090 2,174

Interest 457 402 347 251 171 87

Total 2,262 2,262 2,262 2,261 2,261 2,261

Total

$11,854

$1,715

$13,569

The 2009 Water Enterprise Revenue Refunding Bonds are payable solely from revenues of the Water Fund. During the year ended December 31, 2014, revenues of $35,367,793 were available to pay the annual debt service of $2,253,407. Governmental Activities Series 2005 Certificates of Participation In July 27, 2005 the City issued Certificates of Participation in the amount of $18,505,000. The Certificates were dated July 1, 2005, with interest rates ranging from 2.75% to 4.35% payable semi-annually. The lease payments mature beginning in 2006 and continue through 2024. Annual lease payments and outstanding balance at December 31, 2014 are as follows (in thousands): Year Ending December 31 2015 2016 2017 2018 2019 2020-2024

Principal 945 980 1,015 1,060 1,100 6,200

Interest 456 421 381 341 299 791

Total

$ 11,300

$ 2,689

Total 1,401 1,401 1,396 1,401 1,399 6,991 $ 13,989

NOTES TO FINANCIAL STATEMENTS December 31, 2014

Capital Lease Obligations Governmental Activities In 2010, the City entered into a lease agreement for $40,460 for a 5-year period for the purchase of a printing press. The interest rate is 7.93%. Payments of both principal and interest are due monthly. Minimum required lease payments are as follows as of December 31, 2014 (in thousands): Year Ending December 31 2015

Total

Less amounts representing interest

Present value of lease payments

$ 3

In 2004, the city entered into a lease agreement for $1,005,093 for a 13-year period for an energy efficiency project. The interest rate is 3.99%. Payments for both principal and interest are due monthly in 2005 and quarterly thereafter. Minimum required lease payments are as follows as of December 31, 2014 (in thousands): Year Ending December 31 2015

117

2016

100

Total

217

Less amounts representing interest Present value of lease payments

(8) $209

The total value of the governmental assets capitalized related to the capital leases net of related depreciation is $28,097.

NOTES TO FINANCIAL STATEMENTS December 31, 2014

Business-Type Activities In 2006, the City entered into a lease agreement in the amount of $1,303,000 for a 10-year period for the replacement of the Lake Arbor Golf course irrigation system. The interest rate is 5.94%. Payments of both principal and interest are due semi-annually in January and July. Minimum required lease payments are as follows as of December 31, 2014 (in thousands): Year Ending December 31 2015

158

2016

Total

237

Less amounts representing interest Present value of lease payments

(9) $ 228

The total value of the business-type assets capitalized related to the capital leases net of related depreciation is $871,012.

Changes in General Long-Term Liabilities â€“ During the year ended December 31, 2014 the following changes occurred in liabilities reported in the governmental activities (including internal service funds), and business type activities (in thousands):

Governmental Activities Revenue Bonds Bond Premium Certificates of Participation Capital Lease OPEB Compensated Absences Total Governmental

Business Type Activities Revenue Bond Bond Premium Capital Lease Compensated Absences Total Business Type

Balance 01/01/2014 17,635 1,120 12,210 325 2,262 4,187 37,739

$ $ $ $ $

Balance 01/01/2014 13,614 729 373 693 15,410

Additions $

555 2,349 2,904

Reductions $ $ $ $ $ $ $

Additions $

433 433

3,275 261 910 113 102 2,427 7,088

Reductions $

1,760 104 145 401 2,410

$ $ $ $ $ $ $

Balance 12/31/2014 14,360 859 11,300 212 2,716 4,109 33,555

Balance 12/31/2014 $ 11,854 625 228 726 $ 13,433

Due in 1 year $ $ $ $ $ $ $

3,375 261 945 114 2,054 6,749

Due in 1 year $

1,805 104 151 361 2,421

NOTES TO FINANCIAL STATEMENTS December 31, 2014

4. Other Information A. Risk Management The City has established a risk management program for much of its insurance needs. It is selfinsured for occurrences of general liability and auto liability claims, which are subject to the Colorado Governmental Immunity Act which caps recoveries at $350,000 per person and $990,000 per accident. Property damage is subject to a $100,000 deductible and liability insurance a $250,000 self-insured retention (SIR). Effective April 1, 2013 the Workersâ€™ Compensation program maintains a self-insured retention limit of $500,000. There have been no settlements which exceed the Governmental Immunity Caps for general or auto liability in the last three years. No loss has been recorded in the last three years for the property program that exceeds the $100,000 deductible. Additionally, no claim under workersâ€™ compensation has been reported that exceeded the then effective SIR. Premiums are paid by each department into the Insurance Fund (internal service) to pay claims, claim reserves, loss control and administrative costs of the program including premiums to commercial insurance companies for losses in excess of the self-insured amounts. The City also provides dental insurance for employees. Dental claims are limited to $1,500/year per person. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of payouts and other economic and social factors. The liability for claims and judgments is recorded in the internal service funds. Changes in the balances of claims liabilities during the past two years are as follows (in thousands): Insurance Service $ 936 601 729 808 642 180 $ 1,270

Unpaid Claims, January 1, 2013 Incurred Claims Claim Payments Unpaid Claims, December 31, 2013 Incurred Claims Claim Payments Unpaid Claims, December 31, 2014

Effective January 1, 2014, the City established a self-funded medical insurance program for employees who choose to participate in the program. The City utilizes a third party provider to administer the plan. Excess insurance coverage is maintained for claims greater than $150,000 to limit the loss of any individual claim. The claim liability of $410,000 as of December 31, 2014 represents an estimate of incurred but not reported (IBNR) claims. Medical Insurance $ 7,033 6,623 $ 410

Unpaid Claims, January 1, 2014 Incurred Claims Claim Payments Unpaid Claims, December 31, 2014

NOTES TO FINANCIAL STATEMENTS December 31, 2014

B. Commitments and Contingencies 1) Litigation The City is involved in pending litigation. The City anticipates no potential claims resulting from these cases which would materially affect the financial statements of the City. 2) Federal Grants Federal grants are subject to audit which could result in disallowed costs, the amount which is undeterminable at December 31, 2014. If any costs are disallowed in the future, the City expects them to be insignificant. 3) AURA Commitment Developer Agreements AURA receives incremental property taxes within the Ralston Fields area. In addition, a public improvement corporation (PIC) collects public improvement fees (PIF) within the area in substitution of a sales tax. In 2004, AURA entered into a cooperation agreement among the following parties: • • • •

Ridge Venture LLC (the Developer), Retail Sales Operation, Kipling Ridge Metropolitan District (the District), and The City.

The purpose of this agreement is to accomplish the purposes of the Ralston Fields Urban Renewal Plan (the Plan). In this agreement, a portion of the incremental property tax revenues collected by AURA and a portion of the PIF collected by the PIC are allocated to the City, the District, and the Retail Sales Operation, as follows: • The City: AURA is to pay the City $100,000 a year for a continuing period of 18 consecutive years, which is passed through to the City of Wheat Ridge. This payment is for charges for municipal services incurred by the City of Wheat Ridge for property adjacent to the Ralston Fields Urban Renewal Area (the Area) arising from or out of the development activities that are necessary to implement the purposes of the Plan. • The District: The AURA and the PIC are to remit to the District 60% of all property tax and PIF from the Area, excluding taxes derived from the Retail Sales Operation. Additionally, AURA is to remit to the District another 45% of all sales and property tax revenue derived from the Retail Sales Operation up to the end of the Retail Sales Operation Reimbursement Period. After the Retail Sales Operation Reimbursement Period has expired, the AURA will remit to the District 60% of all property tax and PIF from the Area, inclusive of taxes derived from the Retail Sales Operation. Upon the earlier of (a) payment in full of the District’s outstanding bonds (bonds outstanding as of December 31, 2014, or $9,810,000) or (b) September 30, 2028, AURA’s obligations to the District will terminate. As of December 31, 2014, $2,898,552 had been paid to the district. • Additionally, 100% of the ad valorem tax on real and personal property attributable to the District Mill Levy actually received by AURA shall be remitted to the District. Total amount remitted to the District related to the District Mill Levy during the year ended December 31, 2014 was $41,385. The District Mill Levy remitted by AURA to the District shall not be included in the totals of Property Tax payments as noted above.

NOTES TO FINANCIAL STATEMENTS December 31, 2014

On April 4, 2005, AURA also entered into a Master Redevelopment Agreement with the Jefferson Center Metropolitan District No. 1 (JCMD No. 1) and the City. This agreement, and the obligations associated with this agreement, were assigned and assumed by Jefferson Center Metropolitan District No. 2 (JCMD) effective retroactively to April 4, 2005. On January 11, 2010 this agreement was Amended and Restated. The amended and restated agreement states that JCMD will bear the costs and expenses incurred in connection with the establishment of the Jefferson Center and Northwest Arvada Urban Renewal Areas and adoption of the Jefferson Center and Northwest Arvada Urban Renewal Plans. AURA, subject to the terms and conditions set forth in the Amended and Restated Master Redevelopment Plan Agreement, is obligated to remit to JCMD and JCMD No. 1 the pledged revenues for use in financing project costs and any reimbursable expenditures in accordance with the agreement. Pledged revenues are equal to the total amount of incremental property and sales taxes received by AURA which are available for payment to JCMD and reduced by the administrative fees of $150,000. Additionally, any City Property Tax Increment collected by the county and remitted to AURA shall be utilized by AURA in furtherance of urban renewal plans. With respect to the Jefferson Center Urban Renewal Plan, AURAâ€™s obligations under this agreement will terminate upon the earlier of (a) the payment in full of all JCMD obligations th (bonds outstanding as of December 31, 2014, of $34,455,000), or (b) the date that is the 25 anniversary of the date of adoption of the Jefferson Center Urban Renewal Plan. With respect to the Northwest Arvada Urban Renewal Plan, AURAâ€™s obligations under this agreement will terminate upon the earlier of (a) the date payment is made in full of all JCMD obligations (bonds outstanding as of December 31, 2014, of $34,455,000), supported by Northwest Area Property Taxes or to which Northwest Area Property Taxes are pledged, or th (b) the date that is the 25 anniversary of the date of adoption of the Jefferson Center Urban Renewal Plan. The agreement is expected to terminate in 2034. In 2014, AURA entered into a Disposition and Development Agreement with Park Place Olde Town, Inc. (Park Place). In the agreement, Park Place will bear the costs and expenses incurred in connection with the construction of an upscale multi-family development. AURA is obligated to rebate incremental property taxes collected from the real property and improvements physically located in the project area up to an amount of $1,250,000 with annual interest of 4%. The agreement allows AURA to pay a maximum of $1,628,207 to Park Place over the next 14 years. C. Conduit Debt Obligation From time to time, the City has issued Industrial/Mortgage Revenue Bonds, Mortgage Credit Certificates and Private Activity Bonds. Industrial Bonds are issued to provide financial assistance to private-sector entities for the acquisition and construction of industrial and commercial facilities. Mortgage Bonds are issued to provide financial assistance to low and moderate income persons and families in the purchase of a home. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of such property transfers to the person/family served by the bond issuance. Neither the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2014, there was 1 Industrial Revenue Bond, 973 single and multi-family Mortgage Bonds, 215 Mortgage Credit Certificates and 1 Private Activity Bond. The unpaid balance on the Industrial Revenue Bond is $3.5 million and on the Mortgage Bonds is $11.3 million. The unpaid balance on the Mortgage Credit Certificates is $29.5 million and on the Private Activity Bond is $25.5 million. 67

NOTES TO FINANCIAL STATEMENTS December 31, 2014

D. Retirement Commitments The City has adopted separate retirement or pension plans (Plans) covering all employees, except those hired on a temporary basis. Although it has not expressed any intention to do so, the City has the right under the Plans to discontinue its contribution or to terminate the Plans. Should the Plans terminate at some future time, their net assets will be used to provide participants' benefits. Upon such termination, the assets of the Plans are to be allocated for the benefit of each participant and the beneficiary in a manner approved by the Internal Revenue Service. 1) Defined Benefit Police Pension Plan The City implemented Governmental Accounting Standards Board (GASB) Statement 67, Financial reporting for pension plans in 2014 which establishes improved financial reporting and disclosures to improve understanding of pension fund assets and liabilities. GASB Statement 67 requires the use of the entry age normal valuation to determine the total pension liability. The City had previously used the projected unit credit valuation method to determine the liability. Plan Description The City has a single employer-defined benefit plan to cover the uniformed police officers that did not elect to participate in the Defined Contribution Police Pension Plan that became effective January 1, 1986. In 1986, single premium group annuities were purchased for the benefit of retired employees, beneficiaries and terminated vested employees. After January 1, 1986, all new uniformed police officers are participants in the Defined Contribution Police Pension Plan. The pension plan board consists of seven trustees, the Director of Finance (or designee), the Director of Human Resources (or designee), one resident citizen of the City of Arvada not employed by the City or affiliated with the retirement plan, four members of the retirement system elected by the members of the retirement system. One fully vested participant remains in the Defined Benefit Plan as of December 31, 2014. The participant began receiving retirement benefits in 1997, as defined by City ordinance. Contribution requirements of the plan were not actuarially determined and an actuary was not used to determine the actuarial implications. The City does not issue a stand-alone financial report for the plan. Retirement benefits are established in Chapter 86 of the City of Arvada City Code. A monthly benefit begins at the age of 55 and is based upon the members final base pay, allowing 2 Â˝ percent for each year of credited service to a maximum of 65 percent of final base pay. Final base pay is determined on the basis of the highest total salary received during any three consecutive years of service divided by the number of months for which pay was received. No contributions were made by the participant for the year ended December 31, 2014. The City has budgeted $20,000 per year starting in 2012 to fund the unfunded actuarial liability. In 2012, 2013, and 2014 the City did contribute $20,000 to the plan.

NOTES TO FINANCIAL STATEMENTS December 31, 2014

Annual pension cost (APC), percentage of APC contributed and net pension asset for the plan for the current year and two preceding years are as follows:

Year Ended 12/31/12 12/31/13 12/31/14

Annual Pension Cost $ 7,899 $ 7,476 $ 11,416

Annual Pension Cost Contributed 253.2 % 267.5% 175.2%

Net Pension Asset ($4,469) ($16,993) ($25,577)

Investments The pension plan’s investment policy follows the City’s investment policy as summarized on pages 54-55. As of December 31, 2014 all assets of the plan are invested in a Local Government Investment Pool. For the year ended December 31, 2014, the annual money-weighted rate of return on pension plan investments, net of pension plan expense, was 6.61 percent. The moneyweighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Net Pension Liability of the City The components of the net pension liability of the City at December 31, 2014, were as follows: Total pension liability Plan fiduciary net position City’s net pension liability Plan fiduciary net position as a percentage of the total pension liability

$498,119 356,785 $141,334 71.63%

Significant methods and assumptions included the following: • • • • • •

Actuarial Valuation Date – January 1, 2014 Actuarial Cost Method – Entry Age Normal Cost Method Amortization Method – Level Dollar Rate of Investment Return – 3.5% per annum Remaining Closed Amortization Period – 17 years Asset Valuation Method – Market Value

Mortality rates were based on the RP-2014 Healthy Annuitant Mortality Table, projected generationally using projection scale MP-2014. The discount rate used to measure the total pension liability was 3.5 percent. The projection of cash flows used to determine the discount rate assumed the City will continue to contribute $20,000 per year for the next nine years. Based on those assumptions, the pension plan’s fiduciary net position was projected to make all projected future benefit payments of the current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

NOTES TO FINANCIAL STATEMENTS December 31, 2014

The following presents the net pension liability of the City, calculated using the discount rate of 3.5 percent, as well as what the Cityâ€™s net pension liability would be if it were calculated using a discount rate that is 1-percentage â€“point lower (2.5 percent) or 1-percentage-point higher (4.5 percent) than the current rate:

1% Current 1% Decrease Discount Increase (2.5%) Rate (3.5%) (3.5%) $ 211,727 $ 141,334 $ 83,784

City's net pension liability

2) City of Arvada Retirement Plan â€“ Defined Contribution Plan Effective January 1, 1993, all eligible City employees participate in the City of Arvada Retirement Plan (CARP), a defined contribution plan. All City full-time and part-time employees, except uniformed police officers, the City Manager, the City Attorney, the Municipal Judge and Department Heads are eligible to participate in CARP. 497 employees were participants in the plan as of December 31, 2014. Employer contributions vest with the employee according to the following: Years of Service Less than 1 year 1 year 2 years 3 years 4 years 5 or more years

Vesting Percentage 0% 20% 40% 60% 80% 100%

The plan requires covered employees to contribute 8% of their salary to the plan and the City to contribute 10% of the compensation of all participants hired after April 2, 2004. Employees hired on or before April 2, 2004 had a choice of receiving a flat rate 10% contribution or receiving an age weighted, graduated retirement contribution up to a maximum of 15%. The maximum permissible contribution is the lesser of $51,000 or 100% of the participant's earnings for the plan year. Benefit payments are based upon the participant account balance as of the valuation date immediately preceding the date of distribution. The participant may elect to receive distribution in a lump sum; substantially equal annual, semi-annual, quarterly or monthly installments; through the purchase of an immediate or deferred single payment, nontransferable annuity contract; or a combination of the above. Plan provisions and contribution requirements are established and may be amended by City Council. The required City contribution of $3,977,672 and the required employee contributions of $2,584,319 were paid during 2014. Additional employee contributions, in the form of rollovers, of $613,549 were also made in 2014. The required contributions represent 12.32% and 8% of total covered payroll, respectively. The plan investments are maintained and administered by Great-West Retirement Services. 3) Defined Contribution Police Pension Plan The City provides pension benefits for all of its uniformed officers not covered in the Defined Benefit Police Pension Plan through a defined contribution plan named the Police Money Purchase Plan (PMPP). In a defined contribution plan, benefits depend solely on amounts 70

NOTES TO FINANCIAL STATEMENTS December 31, 2014

contributed to the plan plus investment earnings. Participants are eligible to participate from the date of employment. The Plan requires that the City and the participant each contribute 10% of the participant's compensation. Participants are fully vested after five years of continuous service. City contributions for, and interest forfeited by, employees who leave employment before five years of service are used to reduce the Plan's expenses. Plan provisions and contribution requirements are established and may be amended by City Council. 163 employees were participants as of December 31, 2014. The required contributions for the City and PMPP employees amounted to $1,298,071 each (10% of covered payroll). There were forfeitures of $60,099 also contributed on the employee side, bringing the total employee contributions to $1,358,170. The plan allows voluntary and roll over contributions by employees. The plan investments are maintained and administered by Fidelity Investments. 4) Executive Retirement Plan The City provides pension benefits for the City Manager, the City Attorney, the Municipal Judge and Department Heads through a separate defined contribution plan. The plans are administered by Great-West Retirement Services. Qualified employees are eligible to participate from the date of employment. Under the plan, the City contributes an amount equal to 10.02% of the participant's base salary. The employees covered by this plan were required to make an 8% contribution in 2014. Employees covered under this Plan are vested upon date of hire. Employees who leave employment with the City are entitled to all contributions and interest earnings. Plan provisions and contribution requirements are established and may be amended by City Council. For the year ended December 31, 2014 the City contributed $218,028 for the benefit of the 15 participants in the Plan and the employees contributed $195,054, as required. There were also additional voluntary employee contributions of $17,002. E. Post-Employment Benefits Other than Pensions The City adopted the standards of Governmental Accounting Standards Board Statement No. 45, Accounting and Financial Reporting by Employers for Post-employment Benefits Other Than Pensions (GASB Statement No. 45), for the year ended December 31, 2008, on a prospective basis. Plan Description â€“ The City has established a single employer-defined benefit post-employment healthcare plan. Employees with at least 20 years of service with the City, or 5 years of service with the City plus 59 years of age, are eligible to receive health insurance benefits after retirement. The retiree pays 100% of the health care premium. These benefits expire when the retiree reaches the age of 65. The authority to establish and amend benefit provisions rests with the City Council. The City does not issue a stand-alone financial report for the plan. Funding Policy â€“ The contribution requirements of plan members and the City are established and may be amended by the City Council. The required contribution is based on projected payas-you-go financing requirements. For the year ended December 31, 2014, the City made $101,757 in contributions to the plan and all governmental funds with employees, General Fund, Arvada Center Fund, Parks Fund, Community Development Fund, Arvada Housing Fund and Police Tax Increment Funds, contributed to this number. Plan members are required to contribute their share of the premiums.

NOTES TO FINANCIAL STATEMENTS December 31, 2014

Annual OPEB Cost and Net OPEB Obligation – The City’s annual other post-employment benefit (OPEB) cost is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period of thirty years. The following table shows the components of the City’s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City’s net OPEB obligation to the plan. Annual required contribution Interest on net OPEB obligation Adjustment to annual required contribution Annual OPEB cost Contributions made Increase in net OPEB obligation Net OPEB Obligation, Beginning Net OPEB Obligation, Ending

548,277 84,833 (78,075) 555,035 101,757 453,278 2,262,226 $ 2,715,504

The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the year ended December 31, 2014, follows.

Year Ended 12/31/12 12/31/13 12/31/14

Annual OPEB Cost $ 491,591 $ 492,657 $ 555,035

Percentage of Annual OPEB Cost Contributed 27.4 % 26.8 % 18.3 %

Net OPEB Obligation $ 1,901,430 $ 2,262,226 $2,715,504

Funded Status and Funding Progress – At January 1, 2014, the most recent actuarial valuation date, the actuarial accrued liability (AAL) was $5,332,419 all of which was unfunded. The covered payroll (annual payroll of active employees covered by the plan) was $45,053,303 million, and the ratio of the unfunded actuarial accrued liability (UAAL) to the covered payroll was 11.8%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. These assumptions include among others, annual rates of payroll increases, healthcare cost trends, and mortality rates. Amounts determined regarding the funded status of the plan and the annual required contributions of the City are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents trend information about the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions – Projections of benefits for financial reporting purposes are based on the substantive plan as understood by the City and plan members, and are based on the types of benefits provided at the time of each valuation and the historical pattern of sharing of the benefit costs between the City and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the longterm perspective of the calculations. Significant methods and assumptions included the following: • • •

Actuarial Valuation Date – January 1, 2014 Actuarial Cost Method – Projected Unit Credit Amortization Method – Level Percentage of Pay, Open 72

NOTES TO FINANCIAL STATEMENTS December 31, 2014

• • • • • •

Inflation Rate – 2.5% per annum Remaining Amortization Period – 30 years Assumed Salary Growth Rate – 3.5% per annum Asset Valuation Method – Fair Value Discount Rate – 3.75% per annum Healthcare Cost Trend Rate and Premium Increase – 6% for 2014, 5.7% for 2015 and grading to 4.4% over the life cycle.

F. Related Party Notes In February 2010, the City and AURA entered into a promissory note in which the City loaned AURA $2,745,000 at a simple interest rate of 3.5% for 2 years. Interest payments are due monthly. The loan was due and payable in full on April 1, 2015. The loan was collateralized with a building and two parcels of land. In November 2013, The City and AURA entered into a promissory note in which the City loaned AURA $2,000,000 at a simple interest rate of 3.0% for 2 years. Interest payments are due monthly. The loan is due and payable in full on November 14, 2015. The loan was collateralized with a building and a parcel of land. G. Subsequent Events In May of 2015, the City and AURA agreed to extend their intergovernmental loan agreement in the amount of $2,745,000 an additional year with a new maturity date of April 1, 2016. All of the other terms of the agreement have stayed the same. On January 22, 2015 the City advance refunded the 2005 Certificates of Participation. The City issued $7,880,000 tax-exempt private placement Certificates of Participation (Series 2015-A) and $3,940,000 taxable private placement Certificates of Participation (Series 2015-B). The interest rates range from 1.72% to 1.78% with the final maturity due on December 1, 2024. The debt service payments are scheduled semi-annually at amounts that range from $94,255 to $1,300,154.

H. GASB Statement 67 In 2014, The Police Defined Benefit Pension Plan adopted the provisions of GASB Statement No. 67, Financial Reporting for Pension Plans, an amendment of GASB Statement No. 25, which as its objective is improving usefulness of pension information included in the general purpose external financial reports of state and local governmental pension plans for making decisions and accessing accountability. Adoption of GASB 67 had no effect on net position restricted for pension or on net increase (decrease) in net position. It did however, change the requirements for information disclosed in the footnotes to the financial statements, information to be presented as required supplementary information.

NOTES TO FINANCIAL STATEMENTS December 31, 2014

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Required Supplementary Information

Schedule of Funding Progress Schedule of Funding Progress

Actuarial Valuation Date 01/01/2010 01/01/2012 01/01/2014

Actuarial Value of Assets $ $ $ -

Retiree Health Program Actuarial Accrued Liability (AAL)Projected Unit Credit Cost Unfunded AAL Method (UAAL) $ 5,118,413 $ 5,118,413 $ 4,989,521 $ 4,989,521 $ 5,332,419 $ 5,332,419

Funded Ratio 0% 0% 0%

Covered Payroll $ 43,239,463 $ 41,922,619 $ 45,053,303

UAAL as a Percentage of Covered Payroll 11.84% 11.90% 11.84%

Police Defined Benefit Pension Plan Schedule of Changes in Net Postion and Related Ratios 2014 Total pension liability Service Cost Interest on Total Pension Liability Effect of plan changes Effect of assumption changes or inputs Effect of economic/demogrphic gains (losses) Benefit payments Net change in total pension liability

$ 27,844 18,097 (36,051) (28,819) (18,929)

2013 N/A* N/A N/A N/A N/A N/A N/A

Fiscal Year Ending December 31 2011 2010 2009 2008

2012

2007

2006

2005

N/A N/A N/A N/A N/A N/A N/A

Total pension liability, beginning Total pension liability, ending

517,048 N/A 498,119 N/A

N/A N/A

Fiduciary Net Postion Employer contributions Member contribtuions Investment income net of investment expenses Benefit payments Administrative payments Net change in plan fiduciary net positon

20,000 514 (28,819) (8,305)

N/A N/A N/A N/A N/A N/A

Fiduciary net position, beginning Fiduciary net position, ending

365,090 N/A 356,785 N/A

N/A N/A

Net pension liability ending

141,334 N/A

N/A

71.63% N/A

N/A

Covered payroll

- N/A

N/A

Net pension liability at a % of covered payroll

- N/A

N/A

Fiduciary net position as a % of total pension liability

* Years prior to 2014 are not calculated using GASB Statement 67 requirements and therefore are not shown.

Police Defined Benefit Pension Plan Schedule of City Contributions Last 10 Fiscal Years Actuarially determined contribution Contributions in relation to the Actuarially determined contribution Contribution deficiency (excess) Covered Payroll Contributions as a percentage of covered-employee payroll

2005 2007 2006 2012 2011 2010 2009 2008 2013 2014 N/A N/A N/A N/A N/A N/A N/A N/A $ 12,000 N/A 20,000 N/A (8,000) - N/A

N/A

- N/A

N/A

Methods and assumptions used to determine contribution rates: Actuarial valuation date: 01-Jan-14 Actuarial cost method: Entry age Level dollar Amortization method: Remaining amortization period: 17 years Asset valuation method: Market value Rate of investment return: 3.50% Mortality: PR-2014 Healthy Annuitant Mortality Table

Police Defined Benefit Pension Plan Schedule of Money Weighted Returns Last 10 Fiscal Years

Annual money-weighted rate of return net of investment expense

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

3.50%

N/A

AEDA FUND BALANCE SHEET Year Ended December 31, 2014 (in thousands)

ASSETS Cash and investments Accounts receivable (net) Accrued interest Prepaid costs Total assets

LIABILITIES AND FUND BALANCE LIABILITIES Accounts payable Unearned revenue Total liabilities

580 707 1 6 1,294

44 195 239

FUND BALANCES Nonspendable Assigned Total fund balance

6 1,049 1,055

Total liabilities and fund balances

1,294

AEDA FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended December 31, 2014 (in thousands)

REVENUES Interest Operating grants

11 747

Total Revenues

758

EXPENDITURES Personnel services Services & charges Program costs Professional services Supplies

451 129 228 147 21

Total expenditures

976

NET CHANGE IN FUND BALANCES

(218)

FUND BALANCES, BEGINNING

1,273

FUND BALANCES, ENDING

1,055

Nonmajor Governmental Funds Lands Dedicated Fund Arvada Housing Authority Police Seizure Fund Police Tax Increment Funds Repayment Fund Grants Fund Bond Fund Debt Service Fund

Nonmajor Governmental Funds

NON-MAJOR GOVERNMENTAL FUNDS Special Revenue Funds Lands Dedicated Fund - To account for annexation requirements to be used primarily for park purposes. Arvada Housing Authority Fund - The Section 8 Housing Assistance Payments Program is administered by the Arvada Housing Authority. The program is designed to provide rent subsidies to low or moderate income households. Police Seizure Fund - Colorado statutes authorize local law enforcement agencies to seize cash and other assets belonging to persons convicted of public nuisance crimes. The statutes also specify that the courts may award the property to the agency that apprehended the criminal and that these resources must be used only for specific law enforcement purposes. This fund was established to account for these resources as they are awarded to and expended by the City's law enforcement agency. Police Tax Increment Funds - The purpose of the tax increment funds is to account for the voter approved sales tax increases to fund expanded police services. Grants Fund - To account for receipt of lottery monies through the Conservation Trust Fund. Also to account for the disbursement of monies through transfers to other funds for specific uses as dictated by the Conservation Trust Fund.

Debt Service Funds Bond Fund â€“ To account for transfers from the General Fund and Stormwater Fund for payments of principal and interest on the $18,505,000 Series 2005 COP Bonds. Debt Service Fund â€“ To account for the payment of revenue debt incurred through bond issues other than Water Bond Issues, which are accounted for in the Water Fund. Payments for the Limited Sales and Use Tax Revenue Bonds and Highway Users Tax Fund Bonds are included in this fund.

NON-MAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET December 31, 2014 (in thousands)

Special Revenue Funds Arvada Housing Authority Police Seizure Fund Fund

Lands Dedicated Fund ASSETS Cash and investments Accounts receivable (net) Accrued interest Prepaid costs Total assets

Police Tax Increment (.21) Fund

2,694 4 -

16 73 -

438 1 -

3,041 419 18

2,698

439

3,478

LIABILITIES AND FUND BALANCE LIABILITIES Accounts payable Due to other funds Unearned revenue

22 12 39

189 6

Total liabilities

195

2,698 2,698

16 16

439 439

18 3,265 3,283

FUND BALANCES Nonspendable Restricted Total fund balance Total liabilities and fund balances

2,698

439

3,478

Debt Service Police Tax Increment (.25) Fund

Grants Fund

Debt Service Fund

Bond Fund

Total Non-major Governmental

3,846 498 -

1,847 2 -

109 -

326 -

12,317 990 7 18

4,344

1,849

109

326

13,332

171

382 12 52

178

446

4,166 4,166

1,849 1,849

109 109

326 326

18 12,868 12,886

4,344

1,849

109

326

13,332

NON-MAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Year Ended December 31, 2014 (in thousands)

Special Revenue Funds Arvada Housing Authority Police Seizure Fund Fund

Lands Dedicated Fund REVENUES Taxes Intergovernmental Dedications Investment earnings Miscellaneous

Total Revenues

333 28 -

4 193

361

3,538

197

4,057

3,777

3,404

1,323

3,777

4,727

EXPENDITURES Program costs Debt Service Principal Interest Captal outlay Total expenditures EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES

361

3,517 -

Police Tax Increment (.21) Fund

(239)

3,872 82 44 59

175

(670)

OTHER FINANCING SOURCES (USES) Transfers in Transfers out

60 -

478 -

Total other financing sources (uses)

478

NET CHANGE IN FUND BALANCES

361

FUND BALANCES, BEGINNING FUND BALANCES, ENDING

2,337 $

2,698

(179)

175

195

264

439

(192) 3,475 $

3,283

Debt Service Police Tax Increment (.25) Fund

4,755 56 -

Grants Fund

531 30 -

4,811

561

3,524

Bond Fund

4 -

Debt Service Fund

3,897 10 -

Total Non-major Governmental

12,524 4,130 333 176 273

3,907

17,436

10,728

3,275 631 -

4,185 1,120 2,548

3,907

18,581

1,225

910 489 -

4,749

1,399

561

(1,395)

(1,145)

(400)

200 (155)

1,378 -

2,116 (555)

(400)

1,378

1,561

(338)

606

416

4,504

1,243

326

12,470

4,166

1,849

(17) 126 $

109

326

12,886

LANDS DEDICATED FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL Year Ended December 31, 2014 (in thousands)

Actual

Variance With Final Budget Positive

Amounts

(Negative)

Budgeted Amounts Final

Original REVENUES Dedications Investment earnings

Total revenues NET CHANGE IN FUND BALANCE FUND BALANCE, BEGINNING FUND BALANCE, ENDING

77 62

333 28

256 (34)

139

361

222

139

361

222

2,130

2,337

2,269

2,476

2,698

222

ARVADA HOUSING AUTHORITY SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL Year Ended December 31, 2014 (in thousands)

Actual

Variance With Final Budget Positive

Amounts

(Negative)

Budgeted Amounts Final

Original REVENUES Intergovernmental Federal grants Investment earnings Miscellaneous

Total revenues EXPENDITURES Current expenditures: Personnel services Services and charges Supplies Rents Total expenditures DEFICIENCY OF REVENUES UNDER EXPENDITURES

3,900 5 19

3,517 21

(383) (5) 2

3,924

3,538

(386)

359 77 23 3,532

291 75 12 3,399

68 2 11 133

3,991

3,777

214

(67)

(239)

(172)

NET CHANGE IN FUND BALANCE

(41)

(179)

(138)

FUND BALANCE, BEGINNING

324

195

OTHER FINANCING SOURCES Transfers in

FUND BALANCE, ENDING

283

154

(138)

POLICE SEIZURE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL Year Ended December 31, 2014 (in thousands)

Actual

Variance With Final Budget Positive

Amounts

(Negative)

Budgeted Amounts Original REVENUES Seizure & forfeitures Investment earnings (loss)

Total revenues EXPENDITURES NET CHANGE IN FUND BALANCE FUND BALANCE, BEGINNING FUND BALANCE, ENDING

25 4

Final

25 4

193 4

168 -

197

168

175

171

259

264

263

268

439

171

POLICE TAX INCREMENT (.21) FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL Year Ended December 31, 2014 (in thousands)

Actual

Variance With Final Budget Positive

Amounts

(Negative)

Budgeted Amounts Original REVENUES Sales and use taxes Intergovernmental Federal grants Investment earnings Miscellaneous

Total revenues EXPENDITURES Current expenditures: Personnel services Services and charges Supplies Total current expenditures Capital outlay Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES

226

3,541

3,779

4,057

278

2,801 311 482

2,833 352 482

2,656 275 473

177 77 9

3,594

3,667

3,404

263

1,407

1,323

3,597

5,074

4,727

347

(1,295)

2,032 $

3,872 82 44 59

(56)

FUND BALANCE, BEGINNING

91 22 20

NET CHANGE IN FUND BALANCE

3,646

50 22 20

(56)

OTHER FINANCING SOURCES Transfer In

FUND BALANCE, ENDING

3,449

Final

1,976

2,180

(670)

625

478

(192)

3,475 $

(9) 22 39

1,103

3,475 $

3,283

1,103

POLICE TAX INCREMENT (.25) FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL Year Ended December 31, 2014 (in thousands)

Actual

Variance With Final Budget Positive

Amounts

(Negative)

Budgeted Amounts Original REVENUES Sales and use taxes Investment earnings

Total Revenues EXPENDITURES Current expenditures: Personnel services Services and charges Supplies Total current expenditures Capital outlay Total Expenditures EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES

4,278 25

354 31 385

3,367 307 211

3,130 208 186

237 99 25

3,885

3,524

361

1,942

1,225

717

3,886

5,827

4,749

1,078

1,463

(1,401)

3,269

(400)

(1,401)

2,852 $

4,755 56 4,811

417

FUND BALANCE, BEGINNING

4,426

NET CHANGE IN FUND BALANCE

4,401 25

4,303

417

OTHER FINANCING USES Transfers out

FUND BALANCE, ENDING

Final

(338)

4,504 $

3,103

(400) 1,063

4,504 $

4,166

1,063

GRANTS FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL Year Ended December 31, 2014 (in thousands)

Actual

Variance With Final Budget Positive

Amounts

(Negative)

Budgeted Amounts Original REVENUES Intergovernmental revenues State grants Investment earnings Total revenues

556 -

Final

556 -

531 30

(25) 30

556

561

OTHER FINANCING SOURCES (USES) Transfer In Transfers out

(899)

200 (155)

200 744

Total other financing sources (uses)

(899)

944

(343)

606

949

1,243

NET CHANGE IN FUND BALANCE FUND BALANCE, BEGINNING FUND BALANCE, ENDING

2,911 $ 2,568

1,243 $

900

1,849

949

BOND FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL Year Ended December 31, 2014 (in thousands)

Actual

Variance With Final Budget Positive

Final

Amounts

(Negative)

11,800

Budgeted Amounts Original REVENUES Investment earnings Bond proceeds

Total revenues EXPENDITURES Debt Service Principal Investment earnings Professional services Payment to Escrow Agent Total expenditures DEFICIENCY OF REVENUES UNDER EXPENDITURES OTHER FINANCING SOURCES Transfers in

4 -

4 (11,800)

11,800

(11,796)

845 554 10 -

845 554 10 11,800

910 489 -

(65) 65 10 11,800

1,409

13,209

1,399

(1,409)

(1,395)

1,399

1,378

(21)

11,810

NET CHANGE IN FUND BALANCE

(10)

(17)

(7)

FUND BALANCE, BEGINNING

100

126

FUND BALANCE, ENDING

116

109

(7)

DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL Year Ended December 31, 2014 (in thousands)

Actual

Variance With Final Budget Positive

Amounts

(Negative)

Budgeted Amounts Final

Original REVENUES Sales and use taxes Investment earnings

3,906 12

3,897 10

(9) (2)

3,918

3,907

(11)

EXPENDITURES Services and charges Principal Interest

12 3,275 631

1 3,275 631

11 -

Total expenditures

3,918

3,907

336

326

Total revenues

NET CHANGE IN FUND BALANCE FUND BALANCE, BEGINNING FUND BALANCE, ENDING

336

326

(22) $

(22)

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Enterprise Funds

Enterprise Funds Water Fund Stormwater Fund Wastewater Fund Food Services Fund Golf Fund

ENTERPRISE FUNDS

Water Fund - This fund accounts for all activity within the scope of water utility operations. Water service is available to all areas within the City limits and is extended to some residents of the county and adjacent cities. All activities necessary to provide such service are accounted for in this fund, including administration, operations, capital water projects, maintenance, financing and related debt service, and billing and collection. Wastewater Fund - This fund accounts for all activities necessary in the collection, transmission, and disposal of sewage and wastewater. It includes administration, operations, capital maintenance, financing and billing and collection. Stormwater Fund - This fund accounts for all activities necessary to maintain a stormwater management plan. It includes administration, operations, capital maintenance and billing and collection. Food Services Fund - This fund accounts for all revenues and expenses associated with food service activities including the operation of banquet facilities at the Arvada Center for the Arts and Humanities and offsite catering. Golf Course Fund - This fund accounts for all revenues and expenses of the Lake Arbor and West Woods Golf Courses, including food service operations. It includes administrative, operations, maintenance, financing and related debt service at Lake Arbor and West Woods Golf Courses. Food service activities include restaurant operations at the West Woods and Lake Arbor Golf Courses.

WATER FUND BUDGETARY COMPARISON SCHEDULE Year Ended December 31, 2014 (in thousands)

Budgeted Amounts

REVENUES Sales Licenses/permits and fees Service charges and fees Investment earnings Miscellaneous revenues Water/tap Developer contributions Transfers in

Actual

Variance With Final Budget Positive (Negative)

Original

Final

Amounts

$ 20,123 28 93 267 24 4,835 441

$ 18,563 606 464 46 10,167 5,478 440

25,811

35,764

9,953

16,096 154

16,676 752

15,232 1,057

1,444 (305)

6,563 1,760 501 886

7,576 1,760 501 352

5,836 1,760 493 448

1,740 8 (96)

25,960

27,617

24,826

2,791

Total revenues

(1,560) (28) 513 197 22 5,332 5,478 (1)

EXPENDITURES Operating and maintenance Administration Capital outlay Principal expense Interest expense Transfers out Total expenditures CHANGE IN NET POSITION

(149)

ADJUSTMENTS TO GAAP BASIS Principal Capital outlay Net book value of assets retired Depreciation and amortization

$ (1,806)

10,938

1,760 5,836 (397) (3,745)

CHANGE IN NET POSITION, GAAP BASIS

$ 14,392

12,744

WASTEWATER FUND BUDGETARY COMPARISON SCHEDULE Year Ended December 31, 2014 (in thousands)

Actual

Variance With Final Budget Positive

Final

Amounts

(Negative)

32 12,222 634 380 71

Budgeted Amounts Original REVENUES Licenses/permits and fees Service charges and fees Investment earnings Sewer/tap Developer contributions Transfers in

Total revenues EXPENDITURES Operating and maintenance Administration Capital outlay Transfers out Total expenditures

CHANGE IN NET POSITION

32 12,222 634 380 71

11,334 137 1,001 2,782 -

(32) (888) (497) 621 2,782 (71)

13,339

15,254

1,915

11,562 708 187 288

11,562 708 237 288

9,127 708 1,195 288

2,435 (958) -

12,745

12,795

11,318

1,477

544

3,936

594

ADJUSTMENTS TO GAAP BASIS Capital outlay Net book value of assets retired Depreciation

1,195 (629) (1,204)

CHANGE IN NET POSITION, GAAP BASIS

3,298

3,392

STORMWATER FUND BUDGETARY COMPARISON SCHEDULE Year Ended December 31, 2014 (in thousands)

Actual

Variance With Final Budget Positive

Amounts

(Negative)

Budgeted Amounts Original REVENUES Service charges and fees Grants Investment earnings Developer contributions Total revenues EXPENDITURES Operating and maintenance Capital outlay Transfers out Total expenditures

CHANGE IN NET POSITION

3,147 28 -

Final

3,147 28 -

3,229 166 69 1,898

82 166 41 1,898

3,175

5,362

2,187

1,910 1,618 1,085

1,910 5,415 1,085

1,125 1,645 1,071

785 3,770 14

4,613

8,410

3,841

4,569

$ (1,438)

$ (5,235)

1,521

ADJUSTMENTS TO GAAP BASIS Capital outlay Net book value of assets retired Depreciation

1,645 (99) (760)

CHANGE IN NET POSITION, GAAP BASIS

2,307

6,756

FOOD SERVICES FUND BUDGETARY COMPARISON SCHEDULE Year Ended December 31, 2014 (in thousands)

Actual

Variance With Final Budget Positive

Amounts

(Negative)

Budgeted Amounts Original

REVENUES Sales Investment earnings

Total revenues EXPENDITURES Operating and maintenance Capital outlay Total expenditures CHANGE IN NET POSITION

1,696 6

Final

1,696 6

1,404 6

(292) -

1,702

1,410

(292)

1,617 263

1,362 -

255 263

1,880

1,362

518

(178)

ADJUSTMENTS TO GAAP BASIS Depreciation

(49)

CHANGE IN NET POSITION, GAAP BASIS

(1)

226

GOLF COURSE FUND BUDGETARY COMPARISON SCHEDULE Year Ended December 31, 2014 (in thousands)

Actual

Variance With Final Budget Positive

Amounts

(Negative)

Budgeted Amounts Original REVENUES Sales Service charges and fees Investment earnings Other revenue Transfers in

Total revenues EXPENDITURES Operating and maintenance Principal expense Interest expense Capital outlay Transfers out Total expenditures CHANGE IN NET POSITION

1,466 2,919 12 389

Final

1,601 2,919 12 389

1,653 2,763 4 28 209

52 (156) 4 16 (180)

4,786

4,921

4,657

(264)

4,431 145 13 103 4

4,635 145 13 33 4

4,378 145 10 14 4

257 3 19 -

4,696

4,830

4,551

279

106

ADJUSTMENTS TO GAAP BASIS Principal Capital outlay Net book value of assets retired Depreciation

145 14 (5) (140)

CHANGE IN NET POSITION, GAAP BASIS

120

Insurance Service Fund Arvada Medical Fund Computer Fund Print Shop Fund Vehicle Fund Building Fund

Internal Service Funds

INTERNAL SERVICE FUNDS

Insurance Service Fund - This fund accounts for the activities that are associated with the City’s worker’s compensation, unemployment and property and liability insurance activities. Premiums are paid by each department into this fund to pay claims, claim reserves and administrative costs of the program including premiums to commercial insurance companies for losses in excess of the self-insured amounts. Arvada Medical Fund – This fund accounts for all of the activities associated with the self-insured medical plan for employees who choose to participate in the plan. Computer Fund - This fund accounts for the accumulation of financial resources necessary for the timely and orderly replacement and maintenance of the City’s computer equipment and software. Print Shop Fund - This fund accounts for the accumulation of financial resources necessary for the operation of the City’s print shop, copier maintenance and replacement. Vehicle Fund – This fund accounts for the accumulation of financial resources necessary for the timely and orderly replacement and maintenance of the City’s vehicles and equipment. Building Fund – This fund accounts for the accumulation of financial resources used for non-routine building maintenance.

INTERNAL SERVICE FUNDS COMBINING STATEMENT OF NET POSITION December 31, 2014 (in thousands)

Print Shop Fund

Total Internal Service Funds

Insurance Service Fund

Arvada Medical Fund

5,308 8 148

$ 1,594 1 2 1

5,464

1,598

6,223

103

6,480

2,368

22,236

161

6,035

201

6,434

5,625

1,598

6,232

131

12,515

2,569

28,670

117 1,270 6 -

91 410 -

72 -

14 3

149 42 -

111

443 1,680 48 114

1,393

501

191

111

2,285

6 -

42 -

48 98

146

1,399

501

233

209

2,431

161 4,065

1,097

9 6,151

25 89

6,035 6,247

(8) 2,368

6,222 20,017

4,226

$ 1,097

Computer Fund

Vehicle Fund

Building Fund

ASSETS CURRENT ASSETS Cash and investments Accounts receivable (net) Accrued interest Inventories Prepaid costs Total current assets

6,069 9 145

97 4 2

6,203 3 9 251 14

2,365 3 -

21,636 4 31 255 310

NONCURRENT ASSETS Property and equipment, net of accumulated depreciation Total assets

LIABILITIES CURRENT LIABILITIES Accounts payable Claims payable Accrued compensated absences Capital lease Total current liabilities

NONCURRENT LIABILITIES Accrued compensated absences Capital lease Total non-current liabilities Total liabilities

NET POSITION Net investment in capital assets Unrestricted Total net position

100

6,160

114

12,282

2,360

26,239

INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION Year Ended December 31, 2014 (in thousands)

Insurance Service Fund

Arvada Medical Fund

Print Shop Fund

Computer Fund

Vehicle Fund

Total Internal Service Funds

Building Fund

REVENUES Service charges

Recovered costs Contribuitions Employer Employee Retirees and continued benefit individuals Miscellaneous Total revenues

2,033 50 -

7,384 2,186 189 -

1,878 10 29

313 2 -

3,373 61 -

431 -

8,028 123 7,384 2,186 189 29

2,083

9,759

1,917

315

3,434

431

17,939

1,232

1,122

109

359

1,696

4,518

803 642 16

922 6,634 -

1,733 10

1 3

554 1,345

221 239

1,725 7,276 2,509 1,613

2,693

8,678

1,852

363

3,595

460

17,641

1,081

(48)

(161)

(29)

298

68 -

3 -

84 -

2 (1)

137 77 -

26 (11)

137 260 (12)

Total non-operating revenues (expenses)

214

385

INCOME BEFORE TRANSFERS

(542)

1,084

149

(47)

(14)

683

(3)

13 -

136 -

115 -

264 (3)

(545)

1,097

149

189

101

944

6,011

161

12,093

2,259

$ 25,295

114

$ 12,282

2,360

$ 26,239

EXPENSES Administration Insurance premiums/ prescriptions Uninsured damages and claims Repair and maintenance Depreciation Total expenses Operating income

(610)

NON OPERATING REVENUES (EXPENSES) Gain on sale of assets Investment earnings Interest expense

TRANSFERS IN TRANSFERS OUT CHANGE IN NET POSITION NET POSITION, BEGINNING NET POSITION, ENDING

4,771 $

4,226

1,097

101

6,160

(47)

INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS Year Ended December 31, 2014 (in thousands) Insurance Service Fund Cash Flows From Operating Activities Cash received from external customers Cash received from internal customers Cash payments to external suppliers Cash payments to internal suppliers Cash payments to employees for services Net cash provided (used) by operating activities Cash Flows From Noncapital Financing Activities Transfers to other funds Transfer from other funds Net cash provided (used) by noncapital financing activities

Arvada Medical Fund

(8) 2,093 (1,898) (11) (351) (175)

189 9,569 (8,178) 1,580

Computer Fund

Print Shop Fund

Vehicle Fund

Building Fund

Total Internal Service

39 1,878 (1,722) (121) (109) (35)

2 313 (162) (194) (41)

61 3,373 (1,177) 176 (1,225) 1,208

431 (221) 210

283 17,657 (13,358) 44 (1,879) 2,747

(3)

13 13

136 136

115 115

(3) 264 261

(9) (1) (10)

(1,665) 165 (1,500)

(104) (11) (115)

(1,665) (113) (12) 165 (1,625)

72 72

1 1

89 89

2 2

79 79

27 27

270 270

(106)

1,594

(49)

(77)

237

1,653

Cash and cash equivalents January 1, 2014

5,414

6,015

146

6,280

2,128

19,983

Cash and cash equivalents December 31, 2014

5,308

1,594

6,069

6,203

2,365

21,636

(610)

1,081

(48)

(161)

(29)

298

16 2 (59) 13 462 1

(1) (1) 91 410 -

10 21 (131) -

3 4 -

1,345 13 11 (3) 3

239 -

1,613 1 13 (28) (26) 872 4

(175)

1,580

(35)

(41)

1,208

210

2,747

Cash Flows From Capital and Related Financing Activities Purchases of capital assets Payment of capital lease Interest expense Proceeds from sale of assets Net cash used by capital and related financing activities Cash Flows From Investing Activities Investment earnings Net cash provided by investing activities Net increase (decrease) in cash and cash equivalents

Reconciliation of operating income to net cash provided (used) by operating activities : Operating income Adjustments to reconcile operating income to net cash provided by operating activities : Depreciation expense (Increase) decrease in account receivable (Increase) decrease in inventories (Increase) decrease in prepaid expenditures (Decrease) increase in accounts payable (Decrease) increase in claims payable (Decrease) increase in accrued benefits Net cash provided (used) by operating activities

(3)

102

INSURANCE SERVICE FUND BUDGETARY COMPARISON SCHEDULE Year Ended December 31, 2014 (in thousands)

REVENUES Service charges Recovered costs Investment earnings

Budgeted Amounts Original Final

Actual

Variance With Final Budget Positive

Amounts

(Negative)

Total revenues

2,033 70

CHANGE IN NET POSITION

2,033 70

2,033 50 68

50 (2)

2,103

2,151

877 961 781 -

897 961 781 -

1,232 803 642 3

(335) 158 139 (3)

2,619

2,639

2,680

(41)

EXPENDITURES Administration Insurance premiums Uninsured damages and claims Transfer out Total expenditures

(516)

(536)

(529)

ADJUSTMENTS TO GAAP BASIS Depreciation

(16)

CHANGE IN NET POSITION, GAAP BASIS

103

(545)

ARVADA MEDICAL FUND BUDGETARY COMPARISON SCHEDULE Year Ended December 31, 2014 (in thousands)

Budgeted Amounts Original Final REVENUES Contributions: Employer Employee Retirees and continued benefit individuals Investment earnings Transfer In

Total revenues EXPENDITURES Administration Insurance premiums Claims Total expenditures

CHANGE IN NET POSITION

104

Actual

Variance With Final Budget Positive

Amounts

(Negative)

7,384 2,186 189 3 13

9,775

1,122 922 6,634

(1,122) (922) (6,634)

8,678

(8,678)

1,097

COMPUTER FUND BUDGETARY COMPARISON SCHEDULE Year Ended December 31, 2014 (in thousands)

REVENUES Service charges Recovered costs Miscellaneous Costs Investment earnings Total revenues

Budgeted Amounts Original Final

Actual

Variance With Final Budget Positive

Amounts

(Negative)

EXPENDITURES Administration Repair and maintenance Total expenditures CHANGE IN NET POSITION

1,781 51 27 1,859

1,778 51 27 1,856

1,878 10 29 84 2,001

100 (41) 2 84 145

104 1,197

104 2,505

109 1,733

(5) 772

1,301

2,609

1,842

767

(753)

159

558

ADJUSTMENTS TO GAAP BASIS Depreciation

(10)

CHANGE IN NET POSITION, GAAP BASIS

105

149

912

PRINT SHOP FUND BUDGETARY COMPARISON SCHEDULE Year Ended December 31, 2014 (in thousands)

REVENUES Service charges Recovered costs Investment earnings Total revenues

Budgeted Amounts Original Final

Actual

Variance With Final Budget Positive

Amounts

(Negative)

EXPENDITURES Administration Repair and maintenance Principal Interest Total expenditures CHANGE IN NET POSITION

451 451

400 14 414 $

451 451

313 2 2 317

391 101 9 1 502

359 1 9 1 370

(51)

(53)

ADJUSTMENTS TO GAAP BASIS Principal Depreciation

9 (3)

CHANGE IN NET POSITION, GAAP BASIS

106

(47)

(138) 2 2 (134)

32 100 132 $

(2)

VEHICLE FUND BUDGETARY COMPARISON SCHEDULE Year Ended December 31, 2014 (in thousands)

REVENUES Service charges Recovered costs Investment earnings Transfer in

Budgeted Amounts Original Final

Actual

Variance With Final Budget Positive

Amounts

(Negative)

Gain on sale of assets Total revenues EXPENDITURES Administration Repair and maintenance Capital outlay Total expenditures

CHANGE IN NET POSITION

3,378 42 75

3,373 41 -

3,373 61 77 136 137

61 36 136 137

3,495

3,414

3,784

370

1,744 531 1,769

1,752 549 1,769

1,696 554 1,665

56 (5) 104

4,044

4,070

3,915

155

(549)

(656)

(131)

ADJUSTMENTS TO GAAP BASIS Capital outlay Depreciation

1,665 (1,345)

CHANGE IN NET POSITION, GAAP BASIS

107

189

525

BUILDING FUND BUDGETARY COMPARISON SCHEDULE Year Ended December 31, 2014 (in thousands)

REVENUES Service charges Investment earnings Transfers in

Budgeted Amounts Original Final

Actual

Variance With Final Budget Positive

Amounts

(Negative)

Total revenues EXPENDITURES Repair and maintenance Principal Interest Total expenditures

CHANGE IN NET POSITION

431 15 120

431 13 120

431 26 115

13 (5)

566

564

572

367 102 15

221 104 11

146 (2) 4

484

336

148

236

ADJUSTMENTS TO GAAP BASIS Principal Depreciation

104 (239)

CHANGE IN NET POSITION, GAAP BASIS

108

101

156

Fiduciary Fund

AGENCY FUND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Year Ended December 31, 2014 (in thousands)

Balance January 1, 2014

Additions

Deductions

Balance December 31, 2014

ESCROW FUND ASSETS Cash and investments Accrued Interest Accounts receivable Total assets LIABILITIES Escrow funds Total liabilities

5,553 10 5,563

$ $

5,563 5,563

2,605 10 53 2,668

$ $

2,601 2,601

109

1,106 10 1,116

7,052 10 53 7,115

$ $

1,049 1,049

$ $

7,115 7,115

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Financial Data Schedules

Arvada Housing Authority (CO050) Arvada, CO Program Balance Sheet Summary Submission Type: Audited/A-133

Fiscal Year End: 12/31/2014 14.871 Housing Choice Vouchers

Total

$7,767

126 Accounts Receivable - Tenants

126.1 Allowance for Doubtful Accounts -Tenants

126.2 Allowance for Doubtful Accounts - Other

128 Fraud Recovery

$68,744

128.1 Allowance for Doubtful Accounts - Fraud

-$3,524

$22

$73,009

$15,577

$88,586

111 Cash - Unrestricted 112 Cash - Restricted - Modernization and Development 113 Cash - Other Restricted 114 Cash - Tenant Security Deposits 115 Cash - Restricted for Payment of Current Liabilities 100 Total Cash 121 Accounts Receivable - PHA Projects 122 Accounts Receivable - HUD Other Projects 124 Accounts Receivable - Other Government 125 Accounts Receivable - Miscellaneous

127 Notes, Loans, & Mortgages Receivable - Current

129 Accrued Interest Receivable 120 Total Receivables, Net of Allowances for Doubtful Accounts 131 Investments - Unrestricted 132 Investments - Restricted 135 Investments - Restricted for Payment of Current Liability 142 Prepaid Expenses and Other Assets 143 Inventories 143.1 Allowance for Obsolete Inventories 144 Inter Program Due From 145 Assets Held for Sale 150 Total Current Assets 161 Land 162 Buildings

111

163 Furniture, Equipment & Machinery - Dwellings 164 Furniture, Equipment & Machinery - Administration 165 Leasehold Improvements 166 Accumulated Depreciation 167 Construction in Progress 168 Infrastructure 160 Total Capital Assets, Net of Accumulated Depreciation

$88,586

$5,270

$13,865

$3,205

$11,928

$34,268

171 Notes, Loans and Mortgages Receivable - Non-Current 172 Notes, Loans, & Mortgages Receivable - Non Current - Past 173 Grants Receivable - Non Current 174 Other Assets 176 Investments in Joint Ventures 180 Total Non-Current Assets 200 Deferred Outflow of Resources 290 Total Assets and Deferred Outflow of Resources 311 Bank Overdraft 312 Accounts Payable <= 90 Days 313 Accounts Payable >90 Days Past Due 321 Accrued Wage/Payroll Taxes Payable 322 Accrued Compensated Absences - Current Portion 324 Accrued Contingency Liability 325 Accrued Interest Payable 331 Accounts Payable - HUD PHA Programs 332 Account Payable - PHA Projects 333 Accounts Payable - Other Government 341 Tenant Security Deposits 342 Unearned Revenue 343 Current Portion of Long-term Debt - Capital 344 Current Portion of Long-term Debt - Operating Borrowings 345 Other Current Liabilities 346 Accrued Liabilities - Other 347 Inter Program - Due To 348 Loan Liability - Current 310 Total Current Liabilities 351 Long-term Debt, Net of Current - Capital Projects/Mortgage 352 Long-term Debt, Net of Current - Operating Borrowings

112

353 Non-current Liabilities - Other

$38,588

350 Total Non-Current Liabilities

$38,588

300 Total Liabilities

$72,856

$15,730

513 Total Equity - Net Assets / Position

$15,730

600 Total Liabilities, Deferred Inflows of Resources and Equity -

$88,586

354 Accrued Compensated Absences - Non Current 355 Loan Liability - Non Current 356 FASB 5 Liabilities 357 Accrued Pension and OPEB Liabilities

400 Deferred Inflow of Resources 508.3 Nonspendable Fund Balance 509.3 Restricted Fund Balance 510.3 Committed Fund Balance 511.3 Assigned Fund Balance 512.3 Unassigned Fund Balance

113

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Arvada Housing Authority (CO050) Arvada, CO Program Revenue and Expense Summary Submission Type: Audited/A-133

Fiscal Year End: 12/31/2014 14.871 Housing Choice Vouchers

Total

70300 Net Tenant Rental Revenue

70400 Tenant Revenue - Other

70500 Total Tenant Revenue

$3,516,725

70800 Other Government Grants

71100 Investment Income - Unrestricted

$29

71200 Mortgage Interest Income

71300 Proceeds from Disposition of Assets Held for Sale

71310 Cost of Sale of Assets

71400 Fraud Recovery

$16,476

71500 Other Revenue

71600 Gain or Loss on Sale of Capital Assets

$253

$3,533,483

$198,225

$8,092

91300 Management Fee

91310 Book-keeping Fee

91400 Advertising and Marketing

91500 Employee Benefit contributions - Administrative

$63,749

91600 Office Expenses

$7,350

70600 HUD PHA Operating Grants 70610 Capital Grants 70710 Management Fee 70720 Asset Management Fee 70730 Book Keeping Fee 70740 Front Line Service Fee 70750 Other Fees 70700 Total Fee Revenue

72000 Investment Income - Restricted 70000 Total Revenue 91100 Administrative Salaries 91200 Auditing Fees

91700 Legal Expense

115

91800 Travel

$11,403

91810 Allocated Overhead

$31,283

$320,102

92000 Asset Management Fee

92100 Tenant Services - Salaries

91900 Other 91000 Total Operating - Administrative

92200 Relocation Costs

92300 Employee Benefit Contributions - Tenant Services

92400 Tenant Services - Other

92500 Total Tenant Services

93100 Water

93200 Electricity

93300 Gas

93400 Fuel

93500 Labor

93600 Sewer

93700 Employee Benefit Contributions - Utilities

93800 Other Utilities Expense

93000 Total Utilities

94100 Ordinary Maintenance and Operations - Labor

$1,609

94300 Ordinary Maintenance and Operations Contracts

94200 Ordinary Maintenance and Operations - Materials and

94500 Employee Benefit Contributions - Ordinary Maintenance

$1,609

95100 Protective Services - Labor

95200 Protective Services - Other Contract Costs

95300 Protective Services - Other

94000 Total Maintenance

95500 Employee Benefit Contributions - Protective Services

95000 Total Protective Services

96110 Property Insurance

96120 Liability Insurance

$1,385

96130 Workmen's Compensation

$1,738

96140 All Other Insurance

$4,178

96100 Total insurance Premiums

$7,301

96200 Other General Expenses

$49,531

116

96210 Compensated Absences

96300 Payments in Lieu of Taxes

96400 Bad debt - Tenant Rents

96500 Bad debt - Mortgages

96600 Bad debt - Other

96800 Severance Expense

$49,531

96710 Interest of Mortgage (or Bonds) Payable

96720 Interest on Notes Payable (Short and Long Term)

96730 Amortization of Bond Issue Costs

96700 Total Interest Expense and Amortization Cost

$378,543

$3,154,940

97100 Extraordinary Maintenance

97200 Casualty Losses - Non-capitalized

$3,398,974

$115,947

97400 Depreciation Expense

97500 Fraud Losses

96000 Total Other General Expenses

96900 Total Operating Expenses 97000 Excess of Operating Revenue over Operating Expenses

97300 Housing Assistance Payments 97350 HAP Portability-In

97600 Capital Outlays - Governmental Funds

97700 Debt Principal Payment - Governmental Funds

97800 Dwelling Units Rent Expense

$3,893,464

10010 Operating Transfer In

$6,000

10020 Operating transfer Out

$174,702

90000 Total Expenses

10030 Operating Transfers from/to Primary Government 10040 Operating Transfers from/to Component Unit

10050 Proceeds from Notes, Loans and Bonds

10060 Proceeds from Property Sales

10070 Extraordinary Items, Net Gain/Loss

10080 Special Items (Net Gain/Loss)

10093 Transfers between Program and Project - In

10094 Transfers between Project and Program - Out

$180,702

10091 Inter Project Excess Cash Transfer In 10092 Inter Project Excess Cash Transfer Out

10100 Total Other financing Sources (Uses)

117

10000 Excess (Deficiency) of Total Revenue Over (Under) Total

-$179,279

$195,009

11040 Prior Period Adjustments, Equity Transfers and Correction

11050 Changes in Compensated Absence Balance

11020 Required Annual Debt Principal Payments 11030 Beginning Equity

11060 Changes in Contingent Liability Balance

11070 Changes in Unrecognized Pension Transition Liability

11080 Changes in Special Term/Severance Benefits Liability

11090 Changes in Allowance for Doubtful Accounts - Dwelling

11100 Changes in Allowance for Doubtful Accounts - Other

11170 Administrative Fee Equity

$14,520

11180 Housing Assistance Payments Equity

$1,210

6096

11190 Unit Months Available 11210 Number of Unit Months Leased 11270 Excess Cash 11610 Land Purchases 11620 Building Purchases 11630 Furniture & Equipment - Dwelling Purchases 11640 Furniture & Equipment - Administrative Purchases 11650 Leasehold Improvements Purchases 11660 Infrastructure Purchases 13510 CFFP Debt Service Payments 13901 Replacement Housing Factor Funds

118

Local Highway Finance Report

Financial Planning 02/01 The public report burden for this information collection is estimated to average 380 hours annually.

Form # 350-050-36

City or County: City of Arvada YEAR ENDING : Dec-14 Prepared By: Daniel Leong Phone: 720-898-7122

LOCAL HIGHWAY FINANCE REPORT This Information From The Records Of (example - City of _ or County of _): City of Arvada

I. DISPOSITION OF HIGHWAY-USER REVENUES AVAILABLE FOR LOCAL GOVERNMENT EXPENDITURE A. Local Motor-Fuel Taxes

ITEM

B. Local Motor-Vehicle Taxes

C. Receipts from State HighwayUser Taxes

D. Receipts from Federal Highway Administration

1. Total receipts available 2. Minus amount used for collection expenses 3. Minus amount used for nonhighway purposes 4. Minus amount used for mass transit 5. Remainder used for highway purposes II. RECEIPTS FOR ROAD AND STREET PURPOSES ITEM A. Receipts from local sources: 1. Local highway-user taxes a. Motor Fuel (from Item I.A.5.) b. Motor Vehicle (from Item I.B.5.) c. Total (a.+b.) 2. General fund appropriations 3. Other local imposts (from page 2) 4. Miscellaneous local receipts (from page 2) 5. Transfers from toll facilities 6. Proceeds of sale of bonds and notes: a. Bonds - Original Issues b. Bonds - Refunding Issues c. Notes d. Total (a. + b. + c.) 7. Total (1 through 6) B. Private Contributions C. Receipts from State government (from page 2) D. Receipts from Federal Government (from page 2) E. Total receipts (A.7 + B + C + D)

III. DISBURSEMENTS FOR ROAD AND STREET PURPOSES AMOUNT ITEM AMOUNT A. Local highway disbursements: 1. Capital outlay (from page 2) 12,687,127 4,240,484 2. Maintenance: 3. Road and street services: 3,361,266 a. Traffic control operations 25,833,901 b. Snow and ice removal 1,179,259 1,105,867 c. Other 0 d. Total (a. through c.) 4,540,524 868,387 4. General administration & miscellaneous 9,348,622 5. Highway law enforcement and safety 6. Total (1 through 5) 31,685,144 B. Debt service on local obligations: 1. Bonds: 0 a. Interest 26,939,768 b. Redemption c. Total (a. + b.) 0 2. Notes: 4,360,169 a. Interest b. Redemption 385,207 c. Total (a. + b.) 0 31,685,144 3. Total (1.c + 2.c) 0 C. Payments to State for highways D. Payments to toll facilities E. Total disbursements (A.6 + B.3 + C + D) 31,685,144

IV. LOCAL HIGHWAY DEBT STATUS (Show all entries at par) Opening Debt Amount Issued

Redemptions

Closing Debt

A. Bonds (Total) 1. Bonds (Refunding Portion) B. Notes (Total)

0 0 V. LOCAL ROAD AND STREET FUND BALANCE A. Beginning Balance

B. Total Receipts C. Total Disbursements 31,685,144 31,685,144

Notes and Comments:

119

D. Ending Balance

E. Reconciliation 0

STATE: Colorado YEAR ENDING: Dec-14

LOCAL HIGHWAY FINANCE REPORT II. RECEIPTS FOR ROAD AND STREET PURPOSES - DETAIL ITEM A.3. Other local imposts: a. Property Taxes and Assessments b. Other local imposts: 1. Sales Taxes 2. Infrastructure & Impact Fees 3. Liens 4. Licenses 5. Specific Ownership &/or Other 6. Total (1. through 5.) c. Total (a. + b.)

AMOUNT

ITEM A.4. Miscellaneous local receipts: a. Interest on investments b. Traffic Fines & Penalities 730,229 c. Parking Garage Fees d. Parking Meter Fees e. Sale of Surplus Property f. Charges for Services 375,638 g. Other Misc. Receipts 1,105,867 h. Other 1,105,867 i. Total (a. through h.)

AMOUNT

(Carry forward to page 1)

ITEM C. Receipts from State Government 1. Highway-user taxes 2. State general funds 3. Other State funds: a. State bond proceeds b. Project Match c. Motor Vehicle Registrations d. Other (Specify) - DOLA Grant e. Other (Specify) f. Total (a. through e.) 4. Total (1. + 2. + 3.f)

(Carry forward to page 1)

AMOUNT

ITEM D. Receipts from Federal Government 3,937,402 1. FHWA (from Item I.D.5.) 2. Other Federal agencies: a. Forest Service b. FEMA c. HUD 422,767 d. Federal Transit Admin e. U.S. Corps of Engineers f. Other Federal 422,767 g. Total (a. through f.) 4,360,169 3. Total (1. + 2.g)

AMOUNT

45,856 339,351

385,207 (Carry forward to page 1)

III. DISBURSEMENTS FOR ROAD AND STREET PURPOSES - DETAIL ON NATIONAL HIGHWAY SYSTEM (a) A.1. Capital outlay: a. Right-Of-Way Costs b. Engineering Costs c. Construction: (1). New Facilities (2). Capacity Improvements (3). System Preservation (4). System Enhancement & Operation (5). Total Construction (1) + (2) + (3) + (4) d. Total Capital Outlay (Lines 1.a. + 1.b. + 1.c.5)

OFF NATIONAL HIGHWAY SYSTEM (b)

529,782

4,293,236

406,765

2,672,823 3,710,548 1,073,973 7,456,348 11,519,007

0 908,094

TOTAL (c) 4,823,018 0 0 3,079,587 3,710,548 1,073,973 0 12,687,127

14,913,692 (Carry forward to page 1)

Notes and Comments:

FORM FHWA-536 (Rev.1-05)

PREVIOUS EDITIONS OBSOLETE

120

Statistical Section Statistical Section

Statistical Section This part of the City of Arvada's Comprehensive Annual Financial Report represents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplemental information says about the City's overall financial health. Contents

Page

Financial Trends These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Net Position by Component Changes in Net Position (expenses) Changes in Net Position (revenues) Fund Balances, Governmental Funds Changes in Fund Balances, Governmental Funds Revenue Capacity These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property and sales taxes. Direct and Overlapping Sales Tax Rates Sales and Use Tax Revenue Principal Property Tax Payers Property Tax Levies and Collections Assessed & Actual Values of Taxable Property Debt Capacity These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. Ratios of Outstanding Debt by Type Ratios of General Bonded Debt Outstanding Direct and Overlapping Governmental Activities Debt Legal Debt Margin Information Pledged-Revenue Coverage Schedule of Debt Service Requirements - Governmental Activities Schedule of Debt Service Requirements - Business-Type Activities Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment wherein the City's financial activites take place and to help make comparisons over time and with other governments. Demographic and Economic Statistics Principal Employers Operating Information These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the service the City provides and the activities it performs. Full-time Equivalent City Government Employees by Function/Program Operating Indicators by Function/Program Capital Asset Statistics by Function/Program Sources: Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual Financial Reports for the relevant year. The City implemented GASB Statement 34 in 2003; schedules presenting government-wide information include information beginning in that year.

121

122 123 124 125 126

127 128-129 130-131 132 133

134 135 136 137 138 139 140

141 142-143

144 145 146

City of Arvada Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) (in thousands)

Fiscal Year 2005 Governmental Activities Net investment in capital assets Restricted Unrestricted Total governmental activities net position Business-type Activities Net investment in capital assets Restricted Unrestricted Total business-type activities net position Primary Government Net investment in capital assets Restricted Unrestricted Total primary government net position

201,623 37,925 49,722 289,270

2006 $

146,968 71,037 218,005

348,591 37,925 120,759 507,275

213,611 29,974 52,701 296,286

160,118 83,312 243,430

373,729 29,974 136,013 539,716

2007 $

223,565 15,735 74,472 313,772

2008 $

174,370 100 89,078 263,548

397,935 15,835 163,550 577,320

2009

2010

2011

2012

2013

2014

233,223 17,425 80,607 331,255

$ 218,883 18,174 98,412 $ 335,469

$ 222,197 20,306 100,289 $ 342,792

$ 234,874 25,837 95,365 $ 356,076

$ 252,120 22,517 90,637 $ 365,274

$ 262,131 19,018 92,089 $ 373,238

$ 292,888 19,291 91,032 $ 403,211

186,979 100 92,657 279,736

$ 194,128 89,902 $ 284,030

$ 198,953 1,865 85,899 $ 286,717

$ 206,768 1,866 85,717 $ 294,351

$ 219,419 1,706 91,198 $ 312,323

$ 238,881 1,536 89,643 $ 330,060

$ 252,606 1,805 95,831 $ 350,242

420,202 17,801 172,988 610,991

$ 413,011 18,174 188,554 $ 619,739

$ 421,150 22,171 186,188 $ 629,509

$ 441,642 27,703 181,082 $ 650,427

$ 471,539 24,223 181,835 $ 677,597

$ 501,012 20,554 181,732 $ 703,298

$ 545,494 21,096 186,863 $ 753,453

Source: City of Arvada, Finance Department Note: Government-wide financial statements have been prepared in accordance with the requirements of GASB 34.

122

City of Arvada Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (in thousands)

Functions/Program Activities Expenses Governmental activities: General Government Public safety Public works Parks and recreation Culture Human Services Interest

2005

Fiscal Year 2006 2007

2008

$ 33,914 19,380 14,007 5,865 9,170 5,051 2,084

$ 22,946 21,278 14,843 6,231 9,352 4,170 2,469

$ 26,142 22,054 17,357 6,598 9,155 4,081 2,361

$ 27,821 22,922 16,352 6,861 10,041 4,355 2,245

89,471

81,289

87,748

15,524 7,007 6,421

16,288 6,931 6,982

28,952

2009

2010

2011

2012

2013

2014

$ 22,193 26,578 28,117 7,428 10,797 4,558 1,119

$ 17,745 27,154 30,460 8,173 10,467 4,750 1,107

14,267 23,544 16,967 14,273 10,649 4,251 2,329

$ 15,586 22,999 17,102 14,382 10,000 4,734 1,579

90,597

86,280

86,382

87,555

93,037

100,790

99,856

17,137 7,633 6,894

18,807 9,359 7,079

19,386 8,770 7,035

19,169 9,341 6,764

19,544 9,883 7,016

19,634 10,553 7,302

20,609 11,536 7,575

20,985 11,659 7,911

30,201

31,664

35,245

35,191

35,274

36,443

37,489

39,720

40,555

$ 118,423

$ 111,490

$ 119,412

$ 125,842

$ 121,471

$ 121,656

$ 123,998

$ 130,526

$ 140,510

$ 140,411

Program Revenues Governmental activities: Charges for services: General Government Public works Parks & Recreation Other activities Operating grants and contributions Capital grants and contributions

10,268 2,473 770 4,136 10,019 7,347

9,535 1,926 762 5,269 9,301 4,596

10,193 2,006 866 8,864 9,265 6,960

11,212 1,892 885 6,979 9,008 12,432

5,267 3,008 1,020 6,959 9,501 2,789

5,130 1,578 2,603 5,819 11,789 3,020

5,333 2,038 1,799 6,720 9,218 6,470

5,159 2,623 961 6,737 9,171 12,431

5,726 2,870 902 4,831 11,681 6,706

6,212 4,761 967 4,693 11,330 22,287

Total governmental activities program revenues

35,013

31,389

38,154

42,408

28,544

29,939

31,578

37,082

32,716

50,250

13,502 5,979 8,072 7,602

16,525 6,921 8,359 10,658

15,881 7,692 9,167 10,563

19,285 8,484 8,857 10,706

14,972 9,753 8,661 1,581

17,170 9,904 8,519 64 2,584

18,221 10,336 8,497 200 6,519

21,026 10,704 9,544 12,240

22,635 11,179 8,527 17,633

19,215 11,334 9,239 21,326

35,155

42,463

43,303

47,332

34,967

38,241

43,773

53,514

59,974

61,114

$ 70,168

$ 73,852

$ 81,457

$ 89,740

63,511

$ 68,180

$ 75,351

$ 90,596

$ 92,690

$ 111,364

Total governmental activities expenses Business-type activities: Water Wastewater Other Total business-type activities expenses Total primary government expenses

Business-type activities: Charges for services: Water Wastewater Other Operating grants and contributions Capital grants and contributions Total business-type activities program revenues Total primary government program revenues

123

$ 14,280 $ 16,245 23,989 25,987 25,631 26,644 7,121 7,329 10,613 10,809 4,420 4,580 1,501 1,443

City of Arvada Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (in thousands)

Functions/Program Activities Net (Expense)/Revenue Governmental activities Business-type activities Total primary government net expense

Fiscal Year 2006 2007

2005 (54,458) 6,203 ($48,255)

General Revenues and Other Changes In Net Position Governmental activities: Taxes Property taxes $ 4,404 Franchise taxes Sales taxes 34,674 Transportation taxes 4,295 Investment earnings 4,746 Miscellaneous 5,258 Transfers (1,751) Total governmental activities 51,626 Business-type activites Investment earnings 1,653 Miscellaneous 795 Transfers 1,751

(49,900) 12,262 ($37,638)

4,534 42,426 4,692 6,509 1,449 (2,694) 56,916

2008

(49,594) 11,639 ($37,955)

4,785 50,051 4,668 5,529 4,871 (2,824) 67,080

2009

(48,189) 12,087 ($36,102)

5,099 50,322 4,533 4,707 1,122 (111) 65,672

3,279 7,190 2,694

5,244 411 2,824

3,832 158 111

Total business-type activities Total primary government

4,199 $ 55,825

13,163 $ 70,079

8,479 $ 75,559

4,101 $ 69,773

Change in Net Position Governmental activities Business-type activities Total primary government

(2,832) 10,402 $ 7,570

7,016 25,425 $ 32,441

17,486 20,118 $ 37,604

17,483 16,188 $ 33,671

Source: City of Arvada, Finance Department Note: General Government represents support and administrative divisions such as Legal, Finance, City Manager's Office, KATV, Human Resources, Planning, Code Enforcement, Information Services, Courts, and City Council.

124

2010

(57,736) (224) ($57,960)

5,121 49,530 4,665 1,875 462 882 62,535

2011

(56,443) 2,967 ($53,476)

4,961 50,259 4,761 1,206 1,198 1,381 63,766

(55,977) 7,330 ($48,647)

2012 (55,955) 16,025 ($39,930)

4,953 $ 4,829 50,996 54,298 4,648 4,787 1,602 571 471 1,947 931 (1,279) 63,601 65,153

2013

2014

(68,074) 20,254 ($47,820)

(49,606) 20,559 ($29,047)

4,907 58,519 4,646 107 5,974 2,418 76,571

4,977 64,429 4,757 949 3,305 1,162 79,579

1,361 1,319 (882)

894 207 (1,381)

1,148 87 (931)

582 86 1,279

(56) 104 (2,418)

680 105 (1,162)

1,798 64,333

(280) $ 63,486

304 $ 63,905

1,947 $ 67,100

(2,370) $ 74,201

(377) $ 79,202

4,799 1,574 6,373

7,323 2,687 $ 10,010

7,624 7,634 $ 15,258

9,198 17,972 $ 27,170

8,497 17,884 $ 26,381

29,973 20,182 $ 50,155

City of Arvada Fund Balances â€“ Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in thousands)

City of Arvada Fund Balances - Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year 2006 2007

2005 General Fund Reserve Unreserved Nonspendable Restricted Committed Assigned Unassigned Total general fund All Other Governmental Funds Reserve Unreserved Special revenue funds Debt Service Capital project funds Nonspendable Restricted Committed Assigned Unassigned Subtotal All Other Governmental Funds Total Governmental Funds Reserve Unreserved Nonspendable Restricted Committed Assigned Unassigned

Total all other governmental funds

2,506 27,132 29,638

2,336 28,696 31,032

2,623 25,981 28,604

2008 $

2009

2,484 27,325 29,809

$ 2,521 30,218 32,739

2010 $

2,406 18,652 21,058

2011 $

2012

607 1,780 2,731 17,947 23,065

2013

603 1,891 985 19,486 22,965

2014

640 2,028

23,007 25,675

705 2,248 2,598 25,296 30,847

8,669

10,986

13,382

15,048

16,530

17,855

11,509

11,827

24,196 -

14,163 -

14,605 637 16,566 -

16,254 745 18,077 -

14,862 343 34,275 -

14,831 377 48,810 -

301 24,098 24,279 30,354 -

255 20,654 17,768 33,378 -

231 16,120 14,953 38,314 -

108 17,043 22,764 23,452 -

44,374

36,976

45,190

50,124

66,010

81,873

79,032

72,055

69,618

63,367

11,175 62,837 -

13,322 54,686 -

16,005 57,789 -

17,690 62,243 -

18,842 79,907 -

21,033 82,670 -

908 25,878 24,279 33,085 17,947

858 22,545 17,768 34,363 19,486

871 18,148 14,953 38,314 23,007

813 19,291 22,764 26,050 25,296

$ 74,012

$ 68,008

$ 73,794

$ 79,933

$ 98,749

$ 103,703

$ 102,097

$ 95,020

$ 95,293

$ 94,214

Source: City of Arvada Finance Department Note: In Fiscal Year ending December 31, 2011, the City of Arvada Government Accounting Standard Board Statement number 54. The presentation of the different Fund Balance types are listed above with figures recorded in the applicable categories. A brief definition of these categories are defined on page 48 of the Notes to the Financial Statements section of the CAFR.

125

City of Arvada Changes in Fund Balances-Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (in thousands)

2005

2006

Taxes Licenses and Permits Intergovernmental Charges for Services Fines and Forfeits Interest Memberships and Donations Miscellaneous

$ 42,856 2,686 14,826 10,750 1,129 4,313 422 1,150

$ 50,917 2,275 14,773 10,611 1,152 5,520 419 1,747

Total revenues

$ 78,132

General Government Public Safety Public Works Program Costs Capital Outlay Debt Service Principal Interest Total Expenditures

Fiscal Year 2007

2008

2009

2010

2011

2012

2013

2014

$ 58,839 2,294 14,975 13,203 1,225 4,228 317 4,173

$ 59,773 2,219 13,577 13,867 1,378 3,674 299 894

$ 58,710 3,450 15,291 8,324 1,633 1,431 332 664

$ 59,547 3,014 16,440 9,563 1,558 986 290 924

$ 60,232 2,396 15,166 8,116 1,261 1,231 1,577 839

$ 63,274 2,873 15,441 5,628 1,681 425 427 2,418

$ 67,846 3,275 15,668 5,537 1,710 167 725 5,507

$ 73,917 4,881 15,335 5,552 1,609 689 1,106 3,201

$ 87,414

$ 99,254

$ 95,681

$ 89,835

$ 92,322

$ 90,818

$ 92,167

$ 100,435

$ 106,290

$ 19,024 16,030 13,891 21,988 24,110

$ 14,878 17,523 15,025 23,039 16,324

$ 17,466 17,628 17,792 23,888 8,702

$ 18,747 23,866 16,651 20,621 4,411

$ 12,167 24,094 17,128 20,981 5,946

$ 13,697 23,873 17,286 21,219 9,917

$ 11,080 23,555 18,188 21,300 14,551

$ 12,779 25,518 19,266 21,870 12,986

$ 13,640 26,382 20,498 22,060 16,468

$ 13,377 27,200 21,443 22,517 18,428

1,840 2,084

3,230 2,469

3,345 2,361

3,460 2,245

3,011 1,469

4,079 1,667

4,073 1,515

4,045 1,388

3,895 1,209

4,185 1,120

$ 98,967

$ 92,488

$ 91,182

$ 90,001

$ 84,796

$ 91,738

$ 94,262

$ 97,852

$ 104,152

$ 108,270

(20,835)

(5,074)

8,072

5,680

5,039

584

(3,444)

(5,685)

(3,717)

(1,980)

Bond Issuance costs Proceeds from borrowing Payments to escrow agent Sale of Assets Transfers in Transfers out

18,505 4,752 16,322 (15,837)

724 21,851 (23,505)

724 16,562 (19,572)

725 11,091 (11,357)

(192) 20,857 (21,952) 15,774 (12,884)

7,527 (7,721)

30,777 (26,407)

14,955 (14,136)

19,350 (20,742)

20,110 (15,926)

16,938 (16,037)

Total Other Financing Sources (Uses)

23,742

(930)

(2,286)

459

1,603

4,370

819

(1,392)

3,990

901

2,907

$ (6,004)

6,139

$ 6,642

$ 4,954

$ (2,625)

$ (7,077)

Revenues:

Expenditures:

Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses)

Net Change in Fund Balances

Debt service as a % of Noncapital Expenditures

5,786

Source: City of Arvada, Finance Department

126

273

(1,079)

City of Arvada Direct and Overlapping Sales Tax Rates Last Ten Fiscal Years

City Direct Rates

Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Basic Rate 3.21% 3.46% 3.46% 3.46% 3.46% 3.46% 3.46% 3.46% 3.46% 3.46%

State of Colorado

Jefferson County

2.90% 2.90% 2.90% 2.90% 2.90% 2.90% 2.90% 2.90% 2.90% 2.90%

0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%

Overlapping Rates Rapid Transit Adams District County RTD 0.70% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75%

1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%

Cultural Facilities District 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10%

Baseball Football Stadium District 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.00% 0.00% 0.00%

Source: City of Arvada, Finance Department The combined direct and overlapping rates for Jefferson and Adams counties are 7.96% and 8.21%, respectively.

127

City of Arvada Sales and Use Tax Last Ten Fiscal Years

2005 Sales Tax: Grocery Chain Stores Fast Food Restaurants General Dept Stores Public Utilities Restaurant & Lounges Telephone Equipment & Service Misc. - Other Total Sales Tax

5,986,055 1,516,717 6,618,964 3,632,166 1,916,329 1,280,206 14,705,419

2006 $

2007

6,529,755 1,719,437 7,146,661 4,030,217 2,096,434 1,282,742 16,573,910

7,017,236 1,707,247 7,312,606 4,074,050 2,227,360 1,382,418 17,006,837

2008 $

7,288,486 1,810,008 7,288,906 4,317,928 2,255,327 1,480,300 17,064,447

2009 $

7,321,094 1,802,468 7,325,139 3,947,475 2,223,585 1,476,853 16,152,264

35,655,856

39,379,156

40,727,754

41,505,402

40,248,879

61,453 39,050 91,822 145,881 55,256 9,455 922,461

110,181 32,056 56,729 154,510 62,426 4,088 1,188,404

24,091 22,567 36,522 231,681 45,754 3,556 942,161

27,114 27,749 69,290 225,767 50,506 3,203 1,199,747

68,055 15,459 48,512 589,297 29,931 4,545 1,196,560

Total Use Tax

1,325,378

1,608,394

1,306,332

1,603,376

1,952,358

Auto Use

5,230,665

4,978,494

5,444,119

4,957,715

4,534,445

Building Use

2,582,355

2,404,810

1,930,349

1,772,748

2,382,088

$ 44,794,254

$ 48,370,854

$ 49,408,554

$ 49,839,241

$49,117,770

3.21%

3.46%

Use Tax: Grocery Chain Stores Fast Food Restaurants General Dept Stores Public Utilities Restaurant & Lounges Telephone Equipment & Service Misc. - Other

Total City Direct Sales Tax Rate

Source: City of Arvada, Finance Department. Note: Figures include .46% Sales and Use Tax imposed for police and public safety purposes. Information is reported on cash basis of accounting. Note: Total sales taxes collected in 2014 showed strong growth, coming in 8.23% over 2013. The Grocery Stores category, our largest individual category in terms of sales taxes generated, showed a 6.6% increase in 2014. The Miscellaneous category showed a 9.9% increase over 2013. Furniture and Appliance Store sales, which are included in the Miscellaneous category, showed the largest gains with a 35.39% increase. Total use tax, which is comprised of General, Building, and Automotive use taxes remained essentially flat with a .27% increase. Spurred by the increased activity in the housing market, building use tax has continued to increase over the last four years showing a 52.7% increase in 2014.

128

City of Arvada Sales and Use Tax Last Ten Fiscal Years

2010

2011

2012

2013

2014

$ 7,207,867 2,055,222 7,273,593 3,250,660 2,327,476 1,590,756 16,720,308

$ 7,319,409 2,167,255 7,492,172 3,155,985 2,368,744 1,576,849 17,159,077

$ 8,231,101 2,342,211 7,817,740 3,079,318 2,550,369 1,592,914 17,920,002

$ 8,835,763 2,505,503 7,849,715 3,270,129 2,648,445 1,513,155 19,264,163

$ 9,424,100 2,699,781 8,538,476 3,361,819 2,865,571 1,584,325 21,188,637

40,425,882

41,239,491

43,533,655

45,886,873

49,662,709

56,962 29,626 50,083 1,141,121 23,865 4,545 1,050,757

145,708 45,810 28,893 425,956 45,491 1,670 1,135,344

92,328 33,141 21,726 313,319 32,201 3,238 957,004

83,558 52,869 35,809 385,520 37,678 1,819 1,125,684

26,036 33,509 48,068 280,535 36,234 8,460 1,294,777

2,356,959

1,828,872

1,452,957

1,722,937

1,727,621

4,593,311

5,006,383

5,539,267

6,205,601

6,826,703

2,078,930

2,070,334

2,773,894

3,341,299

5,100,775

$49,455,082

$50,145,080

$53,299,773

$57,156,710

$63,317,806

3.46%

129

City of Arvada, Colorado Principal Property Tax Payers Current Year and Nine Years Ago (in thousands)

2005

Taxable Assessed Value

2006

Percentage of Total City Taxable Assessed Rank Value

Percentage of Total City Taxable Taxable Assessed Assessed Value Rank Value

Taxable Assessed Value

2007

2008

Percentage of Total City Taxable Assessed Rank Value

Taxable Assessed Value

2009 Percentage of Total City Taxable Assessed Rank Value

Taxable Assessed Value

Tax Remitter ADLP 80th LLC Arvada Market Place East Arvada Structures LLC Arvada West 04, LLC Chou Jack C Co Trustee Cobe Laboratories Comcast of Colorado Costco Wholesale Corp. Cub Square Centre LLC Indian Tree LLC Inland Western Arvada LLC Plains End LLC Public Service Co. Qwest Corp. Sundyne Corp. Target Corp. TVO Southwestern Partners

Total

4,346 4,661 8,437 3,573 5,036

8 7 5 9 6

0.42% 0.45% 0.82% 0.35% 0.49%

3,878 4,661 7,969 3,534 3,611 5,036

8 7 5 10 9 6

0.37% 0.45% 0.76% 0.34% 0.35% 0.48%

4,090 4,477 3,889 4,792

9 7 10 5

0.36% 0.40% 0.35% 0.43%

4,090 4,477 4,596 4,792

10 7 6 5

0.36% 0.39% 0.40% 0.42%

3,657 4,297 3,805 4,594

10 7 9 5

0.32% 0.38% 0.34% 0.00% 0.41%

2,842 12,489 13,639 14,242 9,933 -

10 3 2 1 4 -

0.28% 1.21% 1.33% 0.00% 1.38% 0.97% -

12,489 12,601 16,601 9,416 -

3 2 1 4 -

1.19% 1.21% 0.00% 1.59% 0.90% -

11,456 12,504 15,610 12,420 4,281 4,521

4 2 1 3 8 6

1.02% 1.11% 0.00% 1.39% 1.10% 0.38% 0.40%

11,456 13,275 15,238 12,447 4,238 4,390

4 2 1 3 9 8

1.01% 1.17% 0.00% 1.34% 1.09% 0.37% 0.39%

9,478 34,352 9,321 12,036 4,531 4,019

3 1 4 2 6 8

0.84% 3.05% 0.00% 0.83% 1.07% 0.40% 0.36%

7.70%

$ 79,796

7.63%

$ 78,040

$ 79,198

Source: Jefferson and Adams County Assessors Offices Note: The top ten taxpayers represents roughly 7% of the total assessed valuation for the City of Arvada. The remaining 93% represents smaller business and residential customers

130

6.93%

78,999

6.95%

90,090

7.99%

City of Arvada, Colorado Principal Property Tax Payers Current Year and Nine Years Ago (in thousands)

Taxable Assessed Value

2010

2011

2012

Percentage of Total City Taxable Assessed Rank Value

Taxable Assessed Value

2013

Taxable Assessed Value

Rank

2014 Percentage of Total City Taxable Assessed Value

Taxable Assessed Value

Percentage of Total City Taxable Assessed Value

Rank

Tax Remitter ADLP 80th LLC Arvada Market Place East Arvada Structures LLC Arvada West 04, LLC Chou Jack C Co Trustee Cobe Laboratories Comcast of Colorado Costco Wholesale Corp. Cub Square Centre LLC

4,110 3,704 3,486 4,199

7 9 10 6

0.37% 0.33% 0.31% 0.37%

3,609 3,420 3,364

Indian Tree LLC Inland Western Arvada LLC Mountain States Video Inc. Primestar Solar North Park Center Plains End LLC R&M Western Partnership Sundyne Corp.

9,615 28,337 14,170 12,310 4,309 3,891

4 1 2 3 5 8

0.86% 2.53% 0.00% 1.26% 1.10% 0.38% 0.35%

TVO Southwestern Partners

Total

88,131

7.85%

0.32% 0.30% 0.00% 0.39%

3,621 3,707 3,420

9 8 10

0.32% 0.33% 0.30%

3,495

0.31%

3,495

0.31%

3,420

0.30%

4,431

0.39%

4,372

8 9 10 5

4,373

0.39%

4,290

0.38%

3,962 2,948

6 9

0.35% 0.26%

6,979 18,915 15,902 12,290 4,160 3,839

4 1 2 3 6 7

0.62% 1.69% 0.00% 1.42% 1.10% 0.37% 0.34%

9,133 16,722 8,063 18,772 9,951 4,749 -

4 2 5 1 3 6 -

0.81% 1.49% 0.72% 1.67% 0.89% 0.42% 0.00%

8,905 21,848 4,810 9,911 17,140

4 1 5 3 2

0.79% 1.95% 0.43% 0.88% 1.53%

9,052 21,923

4 1

0.80% 1.93%

10,196 18,885

3 2

0.90% 1.67%

0.39% 0.32%

0.25%

2,858 3,822

4,364 3,584 -

6 8

0.34%

76,850

6.54%

82,511

131

7.35%

81,767

7.29%

81,570

7.20%

City of Arvada Property Tax Levies and Collections Last Ten Years (modified accrual basis of accounting)

Fiscal Year Ended 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Taxes Levied for the Fiscal Year (1) 3,996,218 4,169,012 4,422,851 4,757,970 4,803,790 4,668,390 4,677,597 4,548,234 4,585,586 4,657,862

Collection within the Fiscal Year of the Levy Percentage Amount of Levy 3,993,781 4,135,847 4,383,304 4,718,720 4,770,519 4,637,622 4,643,015 4,500,376 4,556,940 4,600,994

99.94% 99.20% 99.11% 99.18% 99.31% 99.34% 99.26% 98.95% 99.38% 98.78%

Source: Jefferson and Adams County Assessors Offices Note: Excludes Specific Ownership Tax (1) Taxes levied is for the tax year preceding the fiscal year. The mill levy rate for 2014 is 4.31.

132

Collections in Subsequent Years 0.00 0.00 3,853 2,080 1,795 1,108 1,750 3,307 8,650 5,564

Total Collections to Date Percentage Amount of Levy 3,993,781 4,135,847 4,387,157 4,720,800 4,772,315 4,638,730 4,644,765 4,503,683 4,565,590 4,606,558

99.94% 99.20% 99.19% 99.22% 99.34% 99.36% 99.30% 99.02% 99.56% 98.90%

City of Arvada Assessed Value and Actual Value of Taxable Property Last Ten Years (in thousands)

Vacant property Residential property Commercial property Industrial property Agricultural property Natural Resources State assessed property Personal property Total taxable assessed value

2005 $ 26,517,270 $ 689,194,530 $ 203,122,180 $ 62,613,590 $ 1,568,160 $ 320 $ 42,921,340 $ 2,762,230 $ 1,028,699,620

2006 $ 20,196,350 $ 703,037,820 $ 212,625,220 $ 60,758,960 $ 1,554,330 $ 320 $ 44,143,550 $ 2,900,950 $ 1,045,217,500

4.31

Total direct tax rate Estimated actual taxable value

Assessed value as a percentage of estimated actual value

Vacant property Residential property Commercial property Industrial property Agricultural property Natural Resources State assessed property Personal property Total taxable assessed value

9,828,930 $

9,886,572 $

10.5%

10.6%

2007 28,559,660 752,547,870 225,401,350 68,972,520 1,516,050 320 45,809,460 3,269,500 1,126,076,730

2008 $ 27,772,060 $ 759,627,790 $ 230,096,840 $ 68,876,220 $ 1,492,280 $ 420 $ 46,001,680 $ 3,298,970 $ 1,137,166,260

2009 $ 22,225,900 $ 728,285,380 $ 240,075,860 $ 70,564,000 $ 1,952,380 $ 420 $ 61,326,920 $ 3,054,470 $ 1,127,485,330

4.31

10,577,558 $ 10.6%

10,844,919 $ 10.5%

10,359,457 10.9%

2010 $ 20,415,720 $ 729,786,750 $ 235,714,770 $ 70,224,120 $ 1,917,540 $ 420 $ 60,603,390 $ 3,416,840 $ 1,122,079,550

2011 $ 20,501,926 $ 717,675,555 $ 219,477,899 $ 67,948,483 $ 2,076,911 $ 415 $ 53,119,623 $ 3,245,250 $ 1,084,046,062

2012 $ 20,001,930 $ 723,906,993 $ 225,781,990 $ 67,051,461 $ 2,062,898 $ 415 $ 52,323,639 $ 3,101,790 $ 1,094,231,116

2013 $ 23,271,345 $ 744,813,813 $ 222,389,232 $ 65,196,131 $ 1,944,906 $ 467 $ 55,792,241 $ 3,080,440 $ 1,116,488,575

2014 $ 24,280,248 $ 762,800,495 $ 219,417,048 $ 63,700,131 $ 1,946,455 $ 494 $ 57,966,461 $ 98,046,183 $ 1,228,157,515

4.31

Total direct tax rate Estimated actual taxable value

$ $ $ $ $ $ $ $ $

Assessed value as a percentage of estimated actual value

10,359,672 $

10,157,393 $

10.8%

10.7%

Assessed values, as reported in this schedule include certain tax-exempt properties

Source: Jefferson and Adams County Assessors' offices.

133

10,236,790 $ 10.7%

10,493,112 $ 10.6%

10,714,249 11.5%

City of Arvada Ratios of Outstanding Debt by Type Last Ten Fiscal Years (in thousands)

Governmental Activities Sales General Tax Certificates Capital of Fiscal Obligation Increment Year Bonds Bonds Lease Participation 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

41,930 39,405 36,790 34,080 30,770 28,580 25,378 22,076 18,755 14,360

977 909 846 768 1,121 783 534 432 324 212

18,505 17,800 17,070 16,320 15,550 14,755 13,935 13,090 12,210 11,300

Business-Type Activities

Water Bonds 26,690 25,390 24,030 22,615 20,205 19,696 17,962 16,178 14,343 12,479

Source: City of Arvada Finance Department

134

Capital Leases

Total Primary Government

Percentage of Personal Income

1,698 2,617 2,465 2,009 1,093 875 647 513 373 228

89,800 86,121 81,201 75,792 68,739 64,689 58,456 52,289 46,005 38,579

3.11% 3.67% 2.51% 2.55% 1.95% 2.01% 1.76% 1.59% 1.36% 1.01%

Per Capita 0.87 0.84 0.77 0.71 0.64 0.60 0.55 0.49 0.42 0.35

City of Arvada Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years (modified accrual basis of accounting)

General Bonded Debt Outstanding

Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

General Obligation Bonds

Redevelopment Bonds $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Percentage of Actual Taxable Value of Property

Total

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Source: City of Arvada Comprehensive Annual Financial Report (2005-2014), Jefferson and Adams County Assessors Offices, Denver Regional Council of Governments

135

Per Capita

$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

City of Arvada Direct and Overlapping Governmental Activities Debt Last Fiscal Year

Debt Outstanding

Jurisdiction Direct City of Arvada

Overlapping Jefferson County School District R-1 Adams County School District (50) APEX (North Jeffco Park & Recreation Hyland Hills Park & Recreation District Arvada West Town Center Business Improvement District Adams County Fire Protection District

2014 Percents Applicable To City of Arvada

Estimated Share of Overlapping Debt

$ 26,731,000

100.00%

26,731,000

446,045,000

15.46%

68,972,603

81,525,000 4,965,000 9,400,000 5,345,000 192,770

6.56% 82.86% 4.20% 100.00% 15.43%

5,352,074 4,114,188 395,216 5,345,000 29,751

Subtotal, overlapping debt

$ 110,939,833

Total, direct and overlapping debt

$ 137,670,833

Source: Jefferson County School District, Adams County Schools District, Jefferson County Parks, and Recreation District, Hylands Hills Park Recreation District, Southwest Adams County Fire Protection District, and City of Arvada

Note: Overlapping governments listed above incorporate a portion of the City of Arvada. This percentage of the incorporated areas is used to calculate the estimated share of overlapping debt. This figure is taken into account to determine the City of Arvada's ability to issue and repay long-term debt.

136

City of Arvada Legal Debt Margin Information Last Ten Fiscal Years

Actual value Debt limit (3% of actual value) Debt applicable to limit: General obligation bonds Less: Amount set aside for repayment of general obligation debt Total net debt applicable to limit Legal debt margin

t Margin Calculation for Fiscal Year 2014 $10,860,085,160 325,802,555 0

0 325,802,555

2005 Debt Limit

Total net debt applicable to limit Legal debt margin

Total net debt applicable to the limit as a percentage of debt limit

2006

2007

2008

2009

2010

2011

2012

2013

2014

294,867,900

313,565,250

337,823,019

325,347,584

315,775,961

315,627,271

308,381,134

311,138,661

319,157,837

325,802,555

313,565,250 $ 337,823,019 $ 325,347,584 $ 315,775,961 $ 315,627,271

$ 308,381,134

$ 311,138,661

$ 319,157,837

$ 325,802,555

0.00%

$ 294,867,900 $

0.00%

Source: Jefferson and Adams County Assessors' Offices Note: Chapter XI, Section 4 of the Charter of the City of Arvada: "The aggregate amount of bonds or other evidences of indebtedness shall not exceed three (3) percent of the actual value, as determined by the County Assessors of Jefferson County and Adams County, of the taxable property in the City of Arvada..." There are limited exceptions.

137

City of Arvada Pledged-Revenue Coverage Last Ten Fiscal Years

Year

Utility Service Charges

Less: Operating Expenses

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

20,075,000 35,876,000 27,144,000 24,695,000 17,759,000 19,815,000 21,541,000 25,827,000 34,174,000 35,324,000

12,519,000 18,140,000 13,481,000 14,455,000 14,625,000 15,099,000 15,046,000 15,520,000 16,434,000 16,737,000

Water Revenue Bonds Net Debt Service Available Revenue Principal Interest Coverage 7,556,000 17,736,000 13,663,000 10,240,000 3,134,000 4,716,000 6,495,000 10,307,000 17,740,000 18,587,000

1,250,000 713,999 1,300,000 946,425 1,360,000 959,164 1,415,000 1,054,494 1,540,000 944,004 1,550,000 697,288 1,630,000 626,495 1,680,000 577,346 1,730,000 529,565 1,760,000 493,407

3.85 7.90 5.89 4.15 1.26 2.10 2.88 4.57 7.85 8.25

Source: City of Arvada, Finance Department Note: Service charges include water sales, licenses and permit fees. Operating expenses include operations, administration & maintenance, and tap fees. Coverage represents the ratio of debt payments to net revenue avaliable. Sales and use tax bonds are backed by the generation of sales and use tax revenues. Figures do not include .46% Sales and Use Tax imposed for police and public safety.

138

Sales and Use Tax Bonds Sales & Use Tax Increment 31,953,127 36,237,120 42,928,135 43,239,537 41,835,694 41,865,635 43,485,458 46,365,504 50,023,809 52,154,257

Debt Service Principal Interest 1,840,000 2,525,000 2,615,000 2,710,000 2,241,564 3,284,428 3,250,434 3,200,000 3,015,000 3,275,000

1,846,441 1,777,421 1,690,339 1,593,666 840,853 1,061,698 935,309 834,119 612,292 631,075

Coverage 8.67 8.42 9.97 10.05 13.57 9.63 10.39 11.49 13.79 13.35

Schedule of Debt Service Requirements Governmental Activities December 31, 2012

Sales & Use Tax Revenue Refunding Bonds - Series 2009

Year 2014 2015 2016 2017 2018 TOTALS

Principal 1,990,000 2,045,000 2,105,000 3,885,000 $10,025,000

Interest 339,600 279,900 218,550 155,400 $993,450

Total Payment 2,329,600 2,324,900 2,323,550 4,040,400 $11,018,450

Principal Balance 10,025,000 8,035,000 5,990,000 3,885,000 $ -

Sales & Use Tax Revenue Refunding Bonds - Series 2013 2014 2015 2016 2017 TOTALS

1,385,000 1,440,000 1,510,000 $4,335,000

202,900 147,500 75,500 $425,900

139

1,587,900 1,587,500 1,585,500 $4,760,900

4,335,000 2,950,000 1,510,000 $ -

Schedule of Debt Service Requirements Business-Type Activities December 31, 2012

Water Enterprise Revenue Refunding Bonds - Series 2009

Year 2014 2015 2016 2017 2018 2019 2020 TOTALS

Principal 1,805,000 1,860,000 1,915,000 2,010,000 2,090,000 2,174,000 $11,854,000

Interest 456,700 402,550 346,750 251,000 170,600 87,000 $1,714,600

140

Total Payment 2,261,700 2,262,550 2,261,750 2,261,000 2,260,600 2,261,000 $13,568,600

Principal Balance 11,855,000 10,050,000 8,190,000 6,275,000 4,265,000 2,175,000 $ -

City of Arvada, Colorado Demographic and Economic Statistics Last Ten Calendar Years

Year

Population

Personal Income (in thousands of dollars)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

103,004 105,455 107,050 106,327 107,702 108,539 106,433 106,673 109,157 111,559

2,885,863 2,345,530 3,236,229 2,968,862 3,523,040 3,216,987 3,316,346 3,297,902 3,374,698 3,813,756

Per Capita Income

Median Age

School Enrollment

Unemployment Rate

28,017 22,242 30,231 27,922 32,711 29,639 31,159 30,916 30,916 34,186

37.2 37.2 37.2 39.8 39.4 39.4 40.5 40.5 40.5 40.0

17,488 18,286 18,064 19,469 19,737 19,508 19,054 19,200 19,188 19,512

5.70% 4.40% 4.30% 5.60% 8.10% 9.80% 8.30% 8.00% 6.50% 4.60%

Source: Denver Regional Council of Governments, Adams and Jefferson County School Districts, Arvada Ecomonic Development Department, and Colorado Department of Labor and Employment

141

142 55,126

5 4 6 7 8 9 10 9

220 300 200 180 175 160 157 160

56,888

53,837

3,051

2 1 3

Rank

450 699 350

Employees

2006

100.00%

94.64%

5.36%

0.28%

0.32% 0.31% 0.28%

0.35%

0.39% 0.53%

0.79% 1.23% 0.62%

% of Total City Employment

94.61% 100.00%

54,817 57,940

0.25% 0.26%

0.28% 0.26% 0.24%

0.31%

0.47% 0.35% 0.35%

0.78% 1.22% 0.64%

5.39%

9 8

7 8 10

4 5 5

2 1 3

Rank

% of Total City Employment mplo

3,123

143 150

160 150 140

180

275 200 200

450 705 370

Employees

2007

100.00%

94.40%

5.60%

0.26% 0.28% 0.25% 0.24%

0.24%

8 7 9 10

0.30% 0.28%

0.48% 0.35% 0.35%

0.68% 1.23% 0.64%

6 7

4 5 5

2 1 3

2008 % of Total City Rank Employment

Figure for 2011 constitutes annual average total of employed residents of Arvada (DoL&E stats are based on worker residency, not location of employment). Also, the former provider of total employment statistics no longer publishes data for Arvada, so bottom line figures are from a different source. **Total for Target, Costco, and Home Depot for 2011 is an estimate

Source: City of Arvada, Economic Development Department and CO Department of Labor & Employment

93.46% 100.00%

51,521

6.54%

1.41% 1.20% 0.58% 0.54% 0.40% 0.38% 0.36% 0.36% 0.36% 0.33% 0.32% 0.29%

Total Employees

3,605

Total Employed by Principal Employers

1 2 3 4 5 6 7 7 7 8 9 10

Rank

% of Total City Employment

Total Employed by Other Employers

780 660 320 300 220 210 200 200 200 180 175 160

Employees

Sorin Group USA(formerly COBE Cardio) City of Arvada Sundyne Corporation Jefferson Ctr. For Mental Health Target Pridemark Paramedic Serv. Inc. Home Depot Costco Super Target Sam's Club King Soopers #36 Kohl's Dept. Store Severn Trent Laboratories/Test America Mark VII Equipment Employers Unity Talx Corporation Xcel Energy Wanco Inc Piper Electric King Sooper #3 King Sooper #22

Employer

2005

City of Arvada Principal Employers Current Year and Nine Years Ago

94.80%

5.20%

0.32%

0.33% 0.32%

0.41% 0.51% 0.38% 0.39%

0.65% 1.28% 0.61%

100.00%

8 9

5 4 7 6

2 1 3

54,097

Rank

% of Total City Employment

51,284

2,813

173

180 175

220 275 207 212

350 691 330

Employees

2009

143

6 4 7 5 9

220 268 195 225 155

186

145

49,463 52,222

Total Employees

2,759

2 1 3

Rank

351 691 323

Employees

Total Employed by Other Employers

Total Employed by Principal Employers

Colorado Lutheran Home Parker Personal Care Homes Inc. Sorin Group USA(formerly COBE Cardio) City of Arvada Sundyne Corporation Jefferson Ctr. For Mental Health Target Pridemark Paramedic Serv. Inc. Home Depot Costco Super Target Sam's Club King Soopers #36 Kohl's Dept. Store Severn Trent Laboratories/Test America Mark VII Equipment Employers Unity Talx Corporation owned by Employers Unity Xcel Energy Wanco Inc Piper Electric King Sooper #3 King Sooper #22

Employer

2010

100.00%

94.72%

5.28%

0.28%

0.36%

0.30%

0.42% 0.51% 0.37% 0.43%

0.67% 1.32% 0.62%

% of Total City Employment

56,842

54,051

2,791

189

200 268 180 225 218 155

351 682 323

Employees

7 4 9 5 6 10

2 1 3

Rank

2011

100.00%

95.09%

4.91%

0.33%

0.35% 0.47% 0.32% 0.40% 0.38% 0.27%

0.62% 1.20% 0.57%

% of Total City Employment

57,150

54,356

2,794

189

200 225 200 225 218 155

351 678 353

Employees

Rank

2012

City of Arvada Principal Employers Current Year and Nine Years Ago

7 4 7 4 6 10

3 1 2

100.00%

95.11%

4.89%

0.33%

0.35% 0.39% 0.35% 0.39% 0.38% 0.27%

0.61% 1.19% 0.62%

% of Total City Employment

55,972

53,274

2,698

124 370 200 234 200 156

294 672 353

Employees

Rank

2013

9 2 6 5 6 8

4 1 3

100.00%

95.18%

4.82%

0.17%

0.22% 0.66% 0.36% 0.42% 0.36% 0.28%

0.53% 1.20% 0.63%

% of Total City Employment

59,654

56,804

2,850

229

218

347 221 210

185 290 250 700 200

Employees

Rank

2014

2 6 8

10 3 4 1 9

100.00%

95.22%

4.78%

0.38%

0.37%

0.58% 0.37% 0.35%

0.31% 0.49% 0.42% 1.17% 0.34%

% of Total City Employment

City of Arvada, Colorado Full-time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

City Manager's/Clerk's Office Community Development Cultural Services Economic Development Parks, Golf, and Hospitality Finance/Risk Management Judicial/Legal Information Technology Human Resources Public Works Public Safety

18.75 23.00 39.00 4.00 71.00 46.25 18.75 23.00 9.00 194.50 212.75

18.75 23.00 41.10 4.00 71.00 46.25 18.75 26.00 9.00 196.25 244.75

18.75 26.00 41.00 4.00 72.00 46.25 19.00 26.00 9.00 198.50 244.75

18.75 26.00 41.00 5.00 72.00 43.25 21.00 29.00 9.00 202.75 239.00

17.00 26.00 40.00 5.00 74.00 43.25 21.00 29.00 9.00 205.25 236.40

17.00 26.00 39.00 4.00 72.00 42.75 22.00 29.00 9.00 200.25 230.40

16.75 24.00 38.75 4.00 70.00 38.00 23.00 29.00 9.00 202.25 227.40

17.75 24.00 38.75 4.00 70.00 38.00 22.00 29.00 9.00 198.25 227.40

18.95 24.00 39.25 4.00 69.00 41.00 20.00 27.00 9.00 198.25 232.40

21.95 25.00 39.25 4.00 73.00 35.00 22.00 27.00 9.00 205.25 233.50

Total

660.00

698.85

705.25

706.75

705.90

691.40

682.15

678.15

682.85

694.95

Function/program

Source: City of Arvada Budget Book 2015-2016 Note: Figures represents budgeted full and part-time benefited employees.

144

City of Arvada, Colorado Operating Indicators by Function/Program Last Ten Fiscal Years

2005

2006

2007

2008

Fiscal Year 2009

2010

2011

2012

2013

2014

Function/Program General government Building permits issued Police Physical arrests Parking violations Traffic violations Other public works Street resurfacing (miles) Potholes repaired Parks and recreation Athletic field permits issued Water Consumers (Tap) New connections Leaks Average daily consumption (thousands of gallons)

4,692

5,077

4,619

5,852

14,582

8,552

5,019

5,718

5,293

9,002

3,148 292 9,296

3,112 473 9,062

3,005 489 10,385

3,067 458 10,448

2,655 314 11,513

2,373 442 10,366

2,384 468 8,776

2,272 436 12,351

2,338 831 12,451

2,245 1,209 11,222

4 2,409

17 8,858

6 1,343

8 2,716

18 6,723

42 1,547

43 2,175

28 2,866

32 4,931

21,111

21,651

23,356

22,062

21,989

20,830

21,871

22,965

22,276

22,841

34,548 324 54 15,200,000

34,368 300 48 17,900,000

34,528 178 66 16,000,029

35,082 131 66 16,300,000

35,104 74 37 13,761,000

35,100 167 47 15,828,849

35,644 141 39 15,805,112

36,177 342 47 18,561,650

36,492 445 47 14,984,589

35,537 476 49 15,378,181

---

Source: City of Arvada Building Department, Police Department, Street Department, Parks Department, and Water Department.

Note: The building permits issued increased aproximately 70% in 2014. The majority of this increase was due to a hail storm that caused roof damage for aproximately 3,000 residents. Potholes repaired increased aproximatly 72% due to additional moisture from rain and snow.

145

City of Arvada, Colorado Capital Assets Statistics by Function/Program Last Ten Fiscal Years

Function/Program Police Stations Patrol units Fire Protection Districts Other public works Streets (miles) Parks and recreation Square Miles (City of Arvada) Playgrounds Tennis/basketball Courts Baseball/softball diamonds Soccer/football fields Community centers/Sport complexes Water Water mains (miles) Fire hydrants Wastewater Sanitary sewers (miles) Storm sewers (miles) Treatment capacity (millions of gallons)

2005

2006

Fiscal Year 2007

2008

2009

2010

2012

2011

2013

2014

1 106 3

1 107 3

1 108 3

1 82 3

1 79 3

3 100 3

398

401

404

411

413

420

427

437

450

36 50 71 26 33 19

36 55 72 25 41 21

36 55 71 35 25 21

36 57 72 41 27 19

36 48 72 41 27 19

36 50 75 41 27 19

38 51 75 41 27 19

39 52 75 41 32 19

39 57 77 43 32 19

39 58 77 43 32 19

560 4,606

540 4,640

542 4,676

550 4,639

551 4,650

568 4808

572 4768

589 4889

602 5018

616 5212

434 125 3,104

392 144 3,160

392 136 3,401

396 140 3,430

400 144 3,256

408 145 3,295

410 148 3,548

416 151 3,387

423 151 3,750

440 166 3,640

Source: City of Arvada, Police, Parks & Rec, Public Works Departments

146

Compliance Section

Single Audit Reports

City of Arvada Schedule of Expenditures of Federal Awards Year Ended December 31, 2014

Federal Grantor/Pass-Through Grantor/ Cluster Program Title U.S. Department of Housing and Urban Development CDBG - Entitlement Grants Cluster Community Development Block Grants/Entitlement Grants Housing Voucher Cluster Section 8 Housing Choice Vouchers

Federal CFDA Number

Pass-through Entity Identifying Number

14.218

N/A

14.871

N/A

Expenditures

473,099

3,516,725

Total U.S. Department of Housing and Urban Development

3,989,824

U.S. Department of Justice Edward Byrne Memorial Justice Assistance Grant Program (JAG Program Cluster) Direct Award Passed through Colorado Department of Public Safety Edward Byrne Memorial Justice Assistance Grant Program (JAG Program Cluster)

16.738

N/A

32,887

16.738

2013-DJ-13-001445-07-3 2013-DJ-14-003210-07-4

42,598

Total U.S. Department of Justice and JAG Program Cluster

75,485

U.S. Department of Transportation Highway Planning and Construction Cluster Direct Award Passed through Colorado Department of Transportation Highway Planning and Construction Cluster Highway Planning and Construction Cluster

Passed through Denver Regional Council of Governments Highway Planning and Construction Cluster

20.205

N/A

20.205

19988 M 040-028 STU M040-026 (19161) STE M040-022 (18256) SAR M040-024 (19097)

288,105

543013 (EX13008)

21,600

20.205

5,000

Total U.S. Department of Transportation and Highway Planning and Construction Cluster

314,705

Executive Office of the President Passed through City of Lakewood High Intensity Drug Trafficking Areas Program

95.001

G14RM0025A

59,959

Total Executive Office of the President

59,959

U.S. Department of Homeland Security Passed through Colorado Department of Public Safety Emergency Management Performance Grants Disaster Grants - Public Assistance (Presidentially Declared Disasters)

97.042 97.036

14EM-15-81 0405

51,900 368,071

Total U.S. Department of Homeland Security

419,971

Total Federal Financial Assistance

147

4,859,944

City of Arvada Notes to Schedule of Expenditures of Federal Awards Year Ended December 31, 2014 Notes to Schedule 1. This schedule includes the federal awards activity of the City of Arvada (the City) and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. 2. Revolving Loan Funds â€“ Not Subject to Compliance The City has certain revolving loan funds, which were originally financed with federal financial assistance through the Community Development Block Grants/Entitlement Grants program (CFDA No. 14.218). However, this program is not subject to any continuing compliance requirements other than continued loan payments, therefore the outstanding loan balances have not been included in the accompanying schedule of expenditures of federal awards. The outstanding balance of the revolving loan funds at December 31, 2014 is $2,385,665. 3. Revolving Loan â€“ Program Income The Community Development Block Grant (CDBG) Program has a revolving loan program for low income housing renovation and repair. Under this federal program, repayments are considered program revenues (income) and loans of such funds to eligible recipients are considered expenditures. The amounts shown as current year disbursements from entitlement funding from the CDBG program do not include program income expenditures of $278,590. 4. 2013 Expenditures Reported in 2014 SEFA The City received a pass-through grant from the Colorado Department of Public Safety; Division of Homeland Security and Emergency Management related the 2013 Colorado floods. The City incurred expenditures of $340,845 in 2013 which were not approved until 2014 and are therefore included in the 2014 schedule of expenditures of federal awards. The City received a pass-through grant from the Colorado Department of Transportation related to the 2013 Colorado floods. The City incurred expenditures of $63,438 in 2013 which were not approved until 2014 and are therefore included in the 2014 schedule of expenditures of federal awards. There are no City match requirements. 5. Of the federal expenditures presented in this schedule, the City provided federal awards to subrecipients as follows: Program

Amount Provided

CFDA Number

Community Development Block Grants / Entitlement Grants Edward Byrne Memorial Justice Assistance Grant Program

148

14.218 16.738

75,000 75,485

150,485

Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards

Honorable Mayor and Members of City Council City of Arvada Arvada, Colorado We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the discretely presented component units, each major fund and the aggregate remaining fund information of the City of Arvada (the City), as of and for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated June 12, 2015, which contained an emphasis of matter paragraph regarding a change in accounting principle. Internal Control Over Financial Reporting Management of the City is responsible for establishing and maintaining effective internal control over financial reporting (internal control). In planning and performing our audit, we considered the City’s internal control to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses as defined above. However, material weaknesses may exist that have not been identified.

149

Honorable Mayor and City Council City of Arvada

Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We noted certain matters that we reported to the City’s management in a separate letter dated June 12, 2015. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Denver, Colorado June 12, 2015

150

Independent Auditor’s Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance

Honorable Mayor and Members of City Council City of Arvada Arvada Colorado

Report on Compliance for Each Major Federal Program We have audited the compliance of the City of Arvada (the City) with the types of compliance requirements described in the OMB Circular A-133, Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2014. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility

Management is responsible for compliance with the requirements of laws, regulations, contracts and grants applicable to its federal programs. Auditor’s Responsibility

Our responsibility is to express an opinion on compliance for each of the City’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the City’s compliance.

151

Honorable Mayor and City Council City of Arvada

Opinion on Each Major Federal Program

In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2014. Other Matters

The results of our auditing procedures disclosed an instance of noncompliance, which is required to be reported in accordance with OMB Circular A-133 and which is described in the accompanying schedule of findings and questioned costs as item 2014-001. Our opinion on each major federal program is not modified with respect to this matter. The Cityâ€™s response to the finding identified in our audit is described in the accompanying schedule of findings and questioned costs. The Cityâ€™s response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. Report on Internal Control Over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Cityâ€™s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Cityâ€™s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

152

Honorable Mayor and City Council City of Arvada

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However we identified a deficiency in internal control over compliance, as described in the accompanying schedule of findings and questioned costs as item 2014-001 that we consider to be a significant deficiency. The Cityâ€™s response to the finding identified in our audit is described in the accompanying schedule of findings and questioned costs. The Cityâ€™s response was not subjected to the auditing procedures applied in the audit of compliance, and accordingly, we express no opinion on the response. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose.

Denver, Colorado June 12, 2015

153

City of Arvada Schedule of Findings and Questioned Costs Year Ended December 31, 2014 Section I – Summary of Auditor’s Results Financial Statements 1.

Type of auditor’s report issued: Unmodified

Qualified

Adverse

Disclaimer

Internal control over financial reporting: Material weakness(es) identified?

Yes

Significant deficiency(ies) identified?

Yes

None Reported

Yes

Material weakness(es) identified?

Yes

Significant deficiency(ies) identified?

Yes

None Reported

Noncompliance material to the financial statements noted?

Federal Awards 4.

Internal control over major programs:

Types of auditor’s report issued on compliance for major programs: Unmodified

Qualified

Adverse

Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of OMB Circular A-133?

154

Disclaimer

Yes

City of Arvada Schedule of Findings and Questioned Costs (Continued) Year Ended December 31, 2014 7.

Identification of major programs: Name of Federal Program or Cluster

CFDA Number

Housing Voucher Cluster Section 8 Housing Choice Vouchers

14.871

Highway Planning and Construction Cluster Highway Planning and Construction

20.205

Disaster Grants â€“ Public Assistance (Presidentially Declared Disasters)

97.036

Dollar threshold used to distinguish between Type A and Type B programs:

Auditee qualified as low-risk auditee? Yes

155

$300,000

City of Arvada Schedule of Findings and Questioned Costs (Continued) Year Ended December 31, 2014 Section II â€“ Financial Statement Findings Reference Number

Finding No matters are reportable.

156

Questioned Costs

City of Arvada Schedule of Findings and Questioned Costs (Continued) Year Ended December 31, 2014 Section III â€“ Federal Award Findings and Questioned Costs Reference Number 2014-001

Finding CFDA No. 97.036 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) Department of Homeland Security, Award Number FEMA-DR-4145CO: 14-L4145-054, Award Year 2014 Passed-through Colorado Department of Public Safety Division of Homeland Security and Emergency Management Criteria: The City of Arvada (City) is required to submit quarterly financial status and progress reports for each reporting period in which a grant/project is open. Condition: We noted that the amount reported for total funds expended to date for one of the quarterly reports was based on an estimate and did not agree to the actual amount recorded in the general ledger by approximately $10,000. Questioned Costs: None Context: We tested two quarterly reports for the year ended December 31, 2014 and noted the issue described above. Effect: The City inaccurately reported the total amount of expenditures incurred during the quarter which was reported on.

Cause: During the time in which the report was submitted, the project manager was primarily responsible for completion of the report and there was no secondary level of review performed by the Finance Department.

Recommendation: We recommend that the Finance Department, specifically the Grant Accountant, participate in the submission of reports by reviewing the financial related fields of the report to ensure that amounts reported are accurate and can be supported by the general ledger.

157

Questioned Costs None

City of Arvada Schedule of Findings and Questioned Costs (Continued) Year Ended December 31, 2014 Reference Number

Finding Views of responsible officials and planned corrective actions: Response: Prior to submission, the Grant Accountant and the Project Manager will approve financial reports required to be submitted by the federal government. Each report will be supported by the general ledger and the backup will be retained by the Grant Accountant. If a percentage is required for the report, a formula will be generated to provide detailed reasoning of why the City is reporting the particular percentage. Additionally, the Grant Accountant will retain a copy of all submitted reports. Person responsible for implementing: Christine Summitt, Grant Accountant Implementation date: All financial reports will be approved by the Grant Accountant starting January 1, 2015. However, prior approval may not be achievable until June 1, 2015 due to timing.

158

Questioned Costs

City of Arvada Summary Schedule of Prior Audit Findings Year Ended December 31, 2014 Reference Number

Summary of Findings No matters are reportable.

159

Status

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City of Arvada 8101 Ralston Road, Arvada, CO 80002